Area dairy farmers left in lurch after farm bill expires

Tuesday, October 2, 2012
Dairy cows are milked Thursday, Aug. 2, 2012 at the Jerry Siemers dairy farm west of Cape Girardeau. (Fred Lynch)

A program benefiting local dairy farmers is among the 34 U.S. Department of Agriculture Programs that are now expired since Congress adjourned without passing a new five-year farm bill.

For the first time in more than 20 years a farm bill was allowed to expire with the end of the federal fiscal year, Sept. 30, without Congress passing some sort of an extension, said Mark Cadle, executive director for the Missouri Farm Service Agency.

Designed to offset low wholesale milk prices during times of high input costs, the Milk Income Loss Contract (MILC) program is used by most dairy farmers in Southeast Missouri.

John Schoen, whose family has been in the dairy business near Oak Ridge since the early 1900s, says it would take him at least $21 to $23 per 100 gallons to break even -- he's getting $16 to $17. The MILC program pays dairy farmers 45 percent of the difference between the target price and the actual price. But beginning Sept. 1, that was cut to 34 percent as the program's end drew near.

This summer's drought forced him to bring in hay all the way from South Dakota. The price of feed has gone up anywhere from 35 percent to 70 percent, depending on the type, Schoen said.

"The price [of milk] has not really changed but maybe 5 to 7 percent over the last 90 to 120 days," he said. "Our cost of production right now is probably at the highest level that has probably ever been recorded."

Schoen's dairy operation supports four families and a handful of other employees, but they've struggled this summer.

Dairy farmers are trying to cut costs by selling off the least productive out of their herd to be slaughtered, Schoen said.

"If we can't make money on a cow, she has outlived her usefulness and we have to remove her from the herd and take her to the auction barn," Schoen said. Some small dairy farms are considering getting out of the business altogether.

While feed prices are skyrocketing and it's been difficult to find hay even from other states, army worms are also adding to dairy farmers' financial misery.

The worms strip the grasses that are trying to grow in pastures, requiring farmers to spray costly chemicals to try to control them, Schoen said.

He estimated most local family dairy farms are losing $10,000 to $15,000 per month right now.

"They are in the red that much," he said. Most are relying on loans to get them through for now, but that can't continue.

They'll lose even more now that the MILC payments are ending.

"The authority for that program has ended entirely. It expired with the [2008] farm bill," Cadle said. "We will make payments for the month of September, but after those payments go out, until the issue is addressed with a new farm bill there won't be payments going out."

Schoen feels like his farm, and others like it, are caught in the middle of a power struggle between Republicans and Democrats in Washington, D.C.

"At this point, it's a political ploy and farming and agriculture are a very, very small part of the farm bill," Schoen said. "We get the attention, but it's the other parts of it, including feeding the poor, that are going to be hurt out of this deal too."

About 80 percent of the multibillion-dollar farm bill is spent on nutrition assistance programs including the program formerly known as food stamps. The programs, however, will continue for now.

Payments for existing Conservation Reserve Program contracts but no new contracts will be approved.

"That would include even the most environmentally sensitive lands such as filter strips along the banks of rivers of streams. We generally have a continuous sign-up for those and that authority has expired as well," Cadle said.

Farmers in this voluntary program receive annual rental payments and cost-share assistance for planting natural resource conserving ground covers on eligible farmland, instead of using it to grow crops. The Wetlands and Grasslands Reserve Programs also expired.

Several horticulture and organic agriculture programs were among the 30-plus programs now without program authority or funding.

Funding for trade and export promotion programs, biofuels and energy programs have expired as well.

Several farm bill programs expired at the end of last year due to budgetary issues including disaster assistance programs for livestock producers, farm-raised fish and honeybees.

A humanitarian trust program named for former Cape Girardeau representative Bill Emerson has also expired.

"In particular, it demonstrates the close connections between our farmers, our food, and the millions of people who contend with hunger around the world every day," Rep. Jo Ann Emerson said of the fund named for her late husband who she replaced. "Our producers in southern Missouri take seriously their obligation to contribute to a solution to hunger, and the Bill Emerson Humanitarian Trust helps them attain that goal."

She said it was irresponsible of the House not to give the farm bill the consideration it deserved before adjourning. The U.S. Senate passed its version of the farm bill earlier this summer.

"This ought to be an urgent priority for leaders of both parties in both the House and the Senate, because the stakes for ag regions of the country are extremely high. Many livelihoods in southern Missouri and around the country depend on farm bill policies," she said. "I understand that, and the members of the agriculture committee understand that, but there are many members of Congress who are disconnected from ag policy."

Agriculture supports one in 12 American jobs, Cadle said.

Sen. Claire McCaskill, D-Mo., said the House should have to answer for why they've put partisan ideology above the jobs and livelihoods of Missourians.

"Anybody in touch with what's going on in Missouri this year knows how badly our farmers, ranchers, and rural families and businesses need certainty -- which is why I successfully fought to pass the farm bill in the Senate, and why the refusal to act in the U.S. House is so unacceptable," she said in an emailed statement.

Sen. Roy Blunt, R-Mo., said in a statement, "I voted for the Senate version of the farm bill and I've repeatedly called on Congress to pass a long-term farm bill to give farm families much-needed economic certainty. In the meantime, I'll continue to work with USDA to make things run as smoothly as possible until Congress passes a bill."

mmiller@semissourian.com

388-3646

Pertinent address:

Oak Ridge, MO

Map of pertinent addresses

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