Monday, October 01, 2012

Farm Bill vs Parity

Fiery Hill, where the boss's mom grew up, just a stone's throw from the wedding,

So as I understand it, everybody wants dairy farmers to jump on the band wagon and insist on passage of the Farm Bill, most of which will go to pay for food stamps and various other programs to feed the needy.

"If you don't lobby hard you will lose MILC," they  (including the very folks who supposedly represent our interests) cajole us.

But, wait, I have read, and had already been thinking all by my ownself, that no Farm Bill means a return to parity pricing, which stems from laws in the early decades of the previous century.

Parity would mean $38 dollars per hundredweight. Right now we are getting in the high-ish teens, $17 per HW for Class III. On my calculator 38 is a lot more than 17...or even 20....but then I was never much good at math.

So let me see now. If we lose MILC it only will be for three months until January before parity may kick in. MILC is a make-up program to try to match the cost of making milk to the paltry amount the current regulations allow us to be paid.

 It pays a percentage of that cost, and although welcome indeed, does not bring the price of milk anywhere near the cost of producing it. 

Many farmers much preferred the now-expired North East Dairy Compact, which raised prices at the farm gate by enforcing the passing along of some of the money paid for milk in the stores to the people who make it. It didn't add very much...a few cents...to the cost of a gallon of milk at the grocery store and it merely forced the middlemen to hand it along instead of hanging on to it. It made a huge difference at the farm.

It took money out of the market instead of out of the taxpayers. Quibbling among states that don't even have a fluid milk market worth mentioning quashed the Compact a while back.

Now we are told that we should lobby like heck to make sure we get supply management dumped on us and a new "insurance" program, and to save MILC, which only makes up a percentage of what we are losing producing milk, so we make sure that we don't get paid what it actually costs us to produce it?

Makes sense to me.....NOT!

7 comments:

kat said...

I told my husband that they'd said this morning that we would go back to parity if they didn't pass the farm bill and he said - Hey, 30 dollar milk!

We're in western NY - about as far southwest as you can get and have a 50 cow herd that has seen better days. Thinking really hard about getting out of milking, but still want to farm. Tough times.

Jan said...

Dairy farming in California is a sad little Bizzaro world of bankruptcies and loss. You would think the officials would help but you would be wrong.

lisa said...

They were talking about it on the radio this morning, going to the doctors and talking about how it will raise milk prices to above 6 dollars a gallon, I wonder who will be getting that pay raise. (NOT THE FARMER)

linda/Il said...

Thought about getting out this fall but in the midwest our corn was shot (30 bu/A. best fld) and cow prices way down so we're still at it. Maybe cow prices would go up with the milk price?!

linda/Il said...

Thought about getting out this fall but in the midwest our corn was shot (30 bu/A. best fld) and cow prices way down so we're still at it. Maybe cow prices would go up with the milk price?!

Cathy said...

From a spoiled consumer:

What I take for granted as I open the glass doors of the dairy section and reach in for a half gallon of milk . .

well . . . it's so big.

Before this blog I didn't have to think about the Marinane's and Kat's ,. . the families who make it happen.

It's big.

threecollie said...

kat we are in much the same boat, pretty much without a paddle. Sold so many cows to pay the bills. Doesn't do much good.

jan, I see conspiracies everywhere I look. And mind boggling corruption.

Lisa, I think it is all scare tactics. It will never actually happen. They just want us to take our medicine in the form of a bad Farm Bill and take it happily.

Linda, I think a lot of people would hang it up quick if beef prices go up.

Cathy, it sure is a mess right now. I read an interesting comment from a cooperative leader I know this morning. He said that when someone gets elected to a milk marketing cooperative board they work for the farmers they represent for about five years. Then they start thinking about making money for the processors. I believe it.