Connecticut dairy farmers at center of fight over farm bill (updated)

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Washington — Rep. Joe Courtney and the state’s dairy farmers are in a pitched battle with the most powerful member of the House of Representatives, Speaker John Boehner, a fight that has stalled the farm bill and whose outcome is likely to affect the price of milk across the country.

“Speaker Boehner, in my opinion, is interjecting his own special interests agenda to the detriment of the farm industry and rural American as a whole,” Courtney said.

Tough words, but a lot is at stake.

Courtney, whose 2^nd District is home to most of Connecticut’s more than 100 dairy farms, was hoping the farm bill under negotiation for more than a year in Congress would reform the dairy program in such a way that the price paid to milk producers would not fluctuate widely from year to year. Most of the nation’s dairy farmers also hoped for this change.

So were most members of the House and Senate agriculture committees who signed onto the plan. But Boehner, a Republican from Ohio, has singlehandedly stopped a final $1 trillion farm bill from moving forward because he likens one of the proposed changes to a “Soviet-style dairy program.”

“Let’s not make (the farm bill) worse by including supply management tools that really will make it worse,” Boehner said last week.

What is stalling the farm bill, which would reauthorize all farm programs and massive nutrition programs like foods stamps, is a price stabilization program that would discourage dairy farmers from producing large quantities of milk during a price dip.

Dairy farmers usually respond to decreasing prices by producing more, resulting in even lower prices. The new program would pay farmers less for losses on milk that’s above their normal production.

Courtney calls Boehner’s criticism of the plan “ludicrous.”

“There ought to be some mechanism so factory farms don’t overproduce,” he said.

The current dairy program — the Milk Income Loss Contract program, known as MILC — gives subsidy payments to dairy farmers when prices are low.

Connecticut dairy farmers received more than $1.5 million from the MILC program in 2012, less than half of what they got in 2009, when milk prices slumped severely.

But the MILC program favors smaller farms. Connecticut dairy farmers, while they don’t have huge herds, generally produce too much milk to benefit greatly from the subsidy.

Carrying Water

Courtney accuses Boehner of “carrying water for processors who are looking for the cheapest price for milk.”

Kroger, a huge grocery store change that processes milk into milk products, is located in Boehner’s district. Ohio is also home to ice cream and yogurt makers — Dannon has a big facility in that state.

Jim Carper, chief editor of Dairy Foods Industry Magazine, a trade publication for milk processors, said processors are fighting the proposed changes in the dairy program.

“They want to get raw materials at the cheapest price possible,” he said.

Carper said it’s possible that Kroger, Dannon and other Ohio-based processors have influenced Boehner.

But Ohio is home to a robust dairy farm industry, too.

Bob Gray, a dairy consultant for the North East Dairy Farmers Cooperative, said he thinks it’s ideology, not the influence of special interests, that’s driving Boehner.

“He doesn’t want the federal government involved in the setting of milk prices,” Gray said. “He made this statement two years ago, but most people thought, when push came to shove, he’d say, ‘Hey, I don’t like it, but let’s pass the farm bill.’”

That’s obviously not happening, to the surprise of longtime farm bill experts like Gray who thought, if anything, a bitter fight over funding levels for food stamps would hold up the legislation. But there seems to be a compromise over food stamps, while a compromise over the dairy program seems elusive.

“You can’t compromise over (the price stabilization) plan,” Gray said. “Either you have it or you don’t.”

The proposed reforms to the dairy industry would also include a program that would allow dairy farmers to buy insurance policies, subsidized by the federal government, that would pay out when the cost of producing milk exceeds the money made from selling it.

This shift from paying direct subsidies to farmers to an insurance-based system is supported by the GOP, which thinks it will save the federal government billions of dollars. Boehner supports that proposed dairy reform.

But Courtney argues that, without the price stabilization plan, the new dairy insurance plan won’t be enough to help the industry from harmful milk price swings.

While he’s a member of the House Agriculture Committee, Courtney is not one of the negotiators from the House and Senate on a final farm bill. Those lawmakers have been stunned that Boehner used his authority — he can keep a final farm bill from coming to a vote — to meddle in the dairy title, usually a tiny part of the massive farm bill that sets policy for nearly all aspects of American farming. and establishes special programs for every crop, from corn to tobacco.

So Courtney, and lobbyists like Gray, must sit by the sidelines and watch how the issue plays out.

“We’re at a standstill, and I don’t know what is going to happen,” Gray said.

Dairy Cliff

The entire farm economy is also concerned, because without reauthorization of the five-year farm bill, there will be no U.S. Department of Agriculture programs for any of the crops grown in this country, from from corn to tobacco, plunging farmers into uncertainty as the spring planting season nears.

To complicate matters, the demise of the old farm bill on Dec. 31 means the nation is in danger of falling over the “dairy cliff” — with milk prices potentially shooting up to about $7 a gallon.

That’s because the nation’s farm policy would be legally required to revert to the provisions of a 1949 farm bill. The dairy industry was much smaller and less efficient than the one that exists today, so it received bigger price supports from the federal government. And if U.S. policy reverted to the old law, the government would be forced to go into the marketplace and buy massive amounts of milk, butter and cheese at about double the going rate. That would result in shortages at the grocery stores and a sharp price spike for consumers.

USDA Agriculture Secretary Tom Vilsack is using his authority to put off that 1949 law.

Christopher Galen, press secretary for the National Milk Producers Federation, said, “Time is our enemy now.”

“At some point Vilsack is going to run out of tricks in his trick bag,” Galen said.

He said he hoped public pressure will finally persuade Boehner to stop his campaign against proposed changes in the dairy program.

“The story of the 113th Congress is that external pressures is what finally gets things done,” he said.

‘Hard, hard times’

Ned Ellis, who owns and operates Mapleleaf Farm in Hebron and milks 250 cows, is also carefully watching the conflict over the dairy program.

“We’ve been through some hard, hard times,” he said.

The “great crash of 2009” resulted when milk production surged that year, and milk prices fell from $18.62 cents a hundredweight to $13.01. That means the price farmers were paid for a gallon of milk dropped from about $1.61 a gallon to $1.12 a gallon.

“We have very large surpluses sometimes, and we want something that would even that out,” Ellis said.

Ellis’ grandfather established Mapleleaf Farm in 1903, passing it on to his son, who left it to his son.

But Ellis said his sons don’t want to inherit the farm.

“They’ve seen it take too much of my life,” he said. “But I have a granddaughter, and maybe she’ll come around.”