Local dairy operators to take hit if farm bill stalls
Posted: December 29, 2012
The Winchester Star
WINCHESTER — Congress has two days to pass the federal farm bill before dairy operators and milk buyers begin to peer over their own fiscal cliff.
If the lawmakers fail to send through a new farm bill — a measure typically passed every five years — consumers and farmers will feel a sting in their wallets.
The bills set the commodity price of milk, and without a new one, the nation’s farm policy will revert to a 1949 permanent law that could result in the price nearly doubling — to as much as $6 to $8 per gallon, according to some estimates.
“Our costs are so high without a farm bill,” said Mike Stiles, who — along with Paul Stiles and family — owns Waverly Farm in Clear Brook. “Yes, we’ll get paid more [for milk], but at the same time ... our other commodities will go up.”
Under the 1949 law, the Agriculture Department would be required to raise prices paid to dairy farmers to an estimated $38 to $40 per each 100 pounds of milk.
The current local market price for dairy commodities is about $22 “and some change” per hundredweight, Stiles said.
And while receiving nearly double the price for milk may sound nice for farmers, other commodities will soar, creating a recipe for disaster.
“Yeah, you’re able to make some money, it sounds like, but pay our feed bill one time and there’s nothing left,” Stiles said. “You just can’t go on in any business losing money every day.”
Which has been the case in an already brutal year for dairy farmers.
Stiles said nearly all of his income goes to feed, fuel and fertilizer. “It’s been a money-losing situation for the last several years.”
Stiles’s daughter Laura Jackson — a field representative for a cooperative in Maryland who also works on the family farm — said she has seen three dairy farmers go out of business in the last two months, all for financial reasons.
Stiles said Waverly Farm tries to be self-sufficient, but lately the farmers have had to use personal funds to support the farm.
“Essentially we’re spending our retirement to make the farm go and at some point you have to say, ‘Enough is enough,’” he said.
Predictions for consumption are not looking good.
And the lack of profit farmers are now seeing on milk products doesn’t include the possibility of much higher prices for them.
“People will look for alternatives if milk is too high,” Stiles said.
Jackson added that she believes consumers will cut back on dairy products altogether.
“It will be disastrous,” she said.
Bev McKay — who owns Hazlewood Farm in Millwood — said a large number of unanswered questions prevent anyone from predicting the outcome of the situation accurately.
“I think Jan. 1 will be a fiasco,” he said. “We need a farm bill so that we can get away from the uncertainty.”
But McKay said $38 to $40 per hundredweight is not a sustainable price for milk.
“You’re going to see consumption go down and productivity go up,” he said. “It’s the perfect storm for disaster.”
So what’s the holdup?
McKay said nearly 80 percent of the farm bill, as it is written, concerns programs such as food stamps and the school assistance program.
He and Jackson believe the politics behind the bill’s language has the bill in a congressional deadlock.
“It’s all about the food stamp program — that’s what the holdup is,” Jackson said.
Dan Scandling, a spokesman for Rep. Frank R. Wolf, R-10th, said the House is in a “complete and total holding pattern right now” on the farm bill.
Without speculating about the reasons, he said no one knows what will happen with the bill.
“It’s unclear because everything is revolving around discussions about the fiscal cliff,” he said. “No one knows what’s going to happen or when or if anything will happen.”
The House is scheduled to meet Sunday night, with hopes of averting a fiscal and dairy cliff.
Jackson also pointed out that matter may not be entirely political.
She said it is difficult to expect government leaders to agree on something when farmers are at odds with each other.
“What’s good for that guy isn’t good for the family farmer,” she said. “We’re fighting amongst ourselves and no one has the right answer right now.”
Still, Stiles said, “The consensus is that we do need a new farm bill; otherwise things will spin out of control.”
Without it, Jackson said, dairy farmers will have no safety net. “And we’re running out of time, so it’s kind of scary.”
Though most are left in the dark, not all dairy farmers are affected in the same way.
Kitty Hockman Nicholas of Hedgebrook Farm near Winchester believes the dairy farmer’s key to a successful future is finding a “niche.”
“Niche marketing is the way of the future,” she said. “There are so many ways to build on the food market.”
Her farm produces 40 to 45 pounds of milk every day, but Hockman Nicholas said she makes most of her money from a “cow-boarding” program in which people buy shares of a cow and receive raw milk in return.
“I don’t feel [the farm bill] would personally affect me,” she said.
Seventy-five percent of her business comes from her cow-boarding program, so Hockman Nicholas is not dependent on milk sales like many others in the area.
She said about 10 percent of her income is from milk sales and 15 percent from raw milk cheese.
Though she is not personally reliant on the government, Hockman Nicholas believes some sort of farm bill legislation should be passed.
“We need to have the right farm bill to take care of everybody,” she added.
— Contact Melissa Boughton at mboughton@winchesterstar.com