For farmers, federal aid checks ease pain, but not worries

By:  Dan Barlow
Vermont Press Bureau

MONTPELIER – Every morning that Beth Kennett went to her barn to milk her family's cows this year, she knew she was losing money.

Kennett, the owner of Rochester's Liberty Hill Farm and a seventh-generation farmer, said for all of 2009, the cost of producing milk on her farm greatly outweighed the cost they received for that product.

She said it cost her farm about $20 to produce 100 pounds of milk. They then sell that milk for about $12.

"I'm praying 2010 will be better," Kennett said on Thursday. "That's all we can do every year. You have to have a lot of faith to be a farmer."

Vermont's congressional delegation has heard the economic cry from Vermont's dairy farms, which now total just more than 1,000. Over the last month, about $5.7 million in direct aid to these dairy farms was released from the federal government as part of an emergency economic package.

Most of the payments – which averaged about $8,000 across the state, depending on the size of the dairy herd – arrived in farmers' bank accounts before the late December 2009 holidays (Kennett called it a "nice Christmas present"). These are direct, one-time emergency payments to farmers and will not need to be paid back.

U.S. Sen. Bernard Sanders, I-Vt., said the funds were part of a $350 million national dairy farm aid program that he sponsored in the Senate. Of those funds, about $290 million went to direct aid and the additional $60 million will be spent buying cheese for food banks and nutrition programs.

Sen. Patrick Leahy, D-Vt., a member of the Senate Appropriations Committee, and U.S. Rep. Peter Welch, D-Vt., the co-chairman of the Congressional Dairy Farmers Caucus, also supported the funding and helped it win approval.

"This last year was the worst in 40 years for dairy farms," Sanders said Thursday during a telephone interview. "We saw a record number of farms go out of business. It's just a very sad state of affairs."

Vermont lost about 80 dairy farms in 2009. Sanders said the closing of a dairy farm does not just mean the end of a family-owned, small-to-moderate sized business. It also means that that family farm no longer supports the local economy by buying grain to feed the herd, purchasing or maintaining equipment such as tractors or using the services of a local veterinarian.

"There is a significant economic loss for the entire community when a farm closes," he said.

Due to the poor economy, milk prices did slump to their lowest point in 40 years during 2009. At one point in the year, farmers were paid $11.30 for 100 pounds of milk – a product that, on average, costs them about $18 per hundred pounds to produce.

Milk prices have rebounded slightly since that low point earlier in 2009 and now sell for about $15 per hundred pounds – still lower than the average cost to produce the product.

Sanders said he knows that the emergency aid payments are a drop in the bucket for most farmers (the $8,000 that the average farm received will pay for between 10 days and one month of grain for their herd).

He said he favors national legislation that would give farmers a stable – and profitable – price for milk, while also controlling the supply side to ensure that an unexpected influx of more milk on the market doesn't cause the prices to drop again.

"Dairy farms have experienced a lot of ups and downs in recent years," Sanders said. "The problem is that the ups aren't really that good while the downs are always really bad."

Kennett agreed, saying she and other dairy farmers greatly appreciate the economic help from Washington, D.C. secured by the state's Congressional delegation. But shots in the arm of extra cash are not long-term, sustainable solutions to this crisis, she said.

She said Vermont dairy farmers are hopeful about a rebound in 2010, although the latest purchase price estimates in December 2009 from Agri-Mark, a New England milk producers cooperative, "doesn't look as good as we hoped."

"Dairy farmers want to make a living selling their product," Kennett said. "We don't like the idea of getting subsidies from the government."

The county-specific funding levels as calculated by the U.S. Department of Agriculture are $1,206,542 for Addison County; $89,328 for Bennington County; $378,141 for Caledonia Country; $241,599 for Chittenden County; $113,441 for Essex County; $1,505,072 for Franklin County; $114,982 for Grand Isle County; $161,587 for Lamoille County; $371,581 for Orange County; $730,752 for Orleans County; $273,943 for Rutland County; $143,378 for Washington County; $139,186 for Windham County; and $114,225 for Windsor County.