California dairy farmers split over milk payments in Farm Bill : The Salt : NPR

A dairy cow peeks out of her stall at Case van Steyn Dairy in Galt, California.

Kathleen Masterson/NPR

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Kathleen Masterson/NPR

A dairy cow peeks out of her stall at Case van Steyn Dairy in Galt, California.

Kathleen Masterson/NPR

California is known as the land of fruits and nuts, but it is also the land of the biggest milk-producing state. It is therefore not surprising that its dairy farmers are at the heart of the debate on the reform of the milk marketing system, which has not really changed much in 30 years.

Congress debates billions of dollars agricultural invoicemassive spending invoice which returns every five years. A section of the Senate bill passed today would change the way the government buy milk dairy farmers in difficult times. Dairy farmers say the current government price is far below what it costs to produce a gallon of milk.

Over the past few years, feed costs have skyrocketed and many farmers have taken out several loans just to stay afloat. Take the milkman Case van Steynwho runs a 1,000-cow dairy in Galt, California. His family has been in the dairy industry for 50 years.

“If you listen to the experts, a lot of people are saying things will get better in the fall or early next year, but those kinds of comments have been made before,” van Steyn said.

He says of California’s 1,600 dairies, more than 40 have gone bankrupt in recent months.

“Now we’re burning equity trying to stay in business because you know you gotta feed the cows and you gotta take care of them you gotta milk them no matter the economy You can’t just lock down the door and say, “I’ll be back in six months.”

This is why van Steyn and his group, Dairy Farmers of Americamade up of farmers across the country, support the dairy supports proposed in the Senate version of the farm bill.

It would essentially create an insurance program. When the cost of feed becomes very high relative to the price of milk, farmers receive a payment. Enrollment in the program would be voluntary, but to get the money, farmers would have to agree to reduce milk production when prices fall.

But the program isn’t working for all dairy farmers, says Michael Marsh, president of Western United Dairymen. He says the problem is that the insurance margin is based on the average food cost. For California dairy farmers, feed is more expensive than elsewhere because it has to be trucked in from Iowa or Illinois.

“Unfortunately, the proposal that is in the dairy title of the Senate farm bill is very discriminatory against dairy farmers, in fact in most parts of the country, because most parts of the country are dependent on dairy imports. ‘pet food from the Midwest,’ says Marsh.

“I do not believe [this program] going to work,” says the owner of the dairy Antoinette Duarte. She runs a 500-cow dairy with her son just south of Sacramento. Duarte says she doesn’t want to pay for a program where supports aren’t frequent enough to keep dairies in balance.

“It’s another cost for dairy farmers,” she says.

But an agricultural economist has another concern with the proposed bill. Formerly at the United States Department of Agriculture, University of California, Davis Economist Dan Sumner says that because the plan forces farmers to cut milk production in tough times, it will punish those who try to expand.

“The long-term health of the industry is about protecting producers from short-term damage when it happens. And that may be a perfectly reasonable trade-off for…some producers in the industry,” he says.

Yet this is not the compromise Duarte seeks. Like many dairy farmers, she says her dream was to pass the dairy on to the next generation. His grandfather had a dairy in the 1920s, which his father and brothers ran until recently.

“They don’t see a future. They were going through a tough time and they felt that instead of hanging on and eating away at their capital, they recently sold their cows and the dairy that my dad worked so hard for, with it wasn’t their fault. It was the economy,” she said.

While the Senate passed its version of the bill today, the House likely won’t begin debating its version of the farm bill until next month. It has slightly different dairy carriers. The key difference is in the way the average feed cost is calculated, says Marsh of Western United Dairymen: This would allow supporters to step in more frequently. However, the House version could be scrapped entirely if the House decides to take up the Senate version of the bill.

Duarte says whatever dairy supports end up in the final version of the Farm Bill, it’s too late for some. And that certainly won’t help anyone who is still trying to stay in the dairy business.

Gerald R. Schneider