Washington, Sep 16 - Standing next to Maggie the Ayrshire dairy cow, six U.S. senators and a farm group asked Congress on Tuesday to approve $350 million to offset the lowest farm-gate milk prices in three decades.
The money would be part of the Agriculture Department funding bill for 2010, which opens Oct 1. House and Senate negotiators are expected to meet soon to write a final version of the bill.
Maryland dairy farmer Charles Iager, owner of three-year-old Maggie, a chestnut-and-white Ayrshire, said his milk fetches less than half of its 2007 price and his production costs are higher than the milk price. Iager has a 300-cow dairy herd.
"We can hang in there because we're an old, established farm," Iager told reporters, but young farmers have fewer resources.
The extra funds probably will be used to boost dairy price supports, said Vermont Senator Bernie Sanders, who won Senate backing for the money on Aug. 4.
"It's not going to be herd buyouts," Sanders said.
The funds would allow a short-term increase of $1.50 per 100 lbs of milk in dairy support prices. House-Senate negotiators will decide the format.
USDA has spent more than $1.25 billion to bolster dairy prices this year, including purchases of surplus dairy products, revival of dairy export subsidies, payment of Milk Income Loss Contract subsidies, a transfer of USDA-owned dry milk to public feeding programs, and a three-month, $250 million boost in dairy support prices that runs through October.
Judiciary Committee chairman Pat Leahy said his committee would examine "antitrust issues" in the dairy industry at a hearing on Saturday in Vermont. Christine Varney, assistant attorney general for antitrust, and Joe Glauber, USDA chief economist, will testify, said a Leahy aide.
"There's too much concentration in the industry," said New York Senator Charles Schumer. Sanders said "monopolization" among dairy processors must be addressed.
At a news conference in a park across the street from the Capitol, Sanders, Leahy and Schumer and Senators Amy Klobuchar of Minnesota, Tom Udall of New Mexico and Robert Casey of Pennsylvania said the $350 million would be a short-term response to low milk prices.
Roger Johnson, president of the 300,000-member National Farmers Union, said the aid would be "a much-needed lifeline." The NFU says a few large processors dominate the industry, "leaving producers and consumers to suffer as a result."
Milk prices are forecast to average $12.15 per 100 lbs at the farm gate this year, down $6 from 2008 due to the economic recession and an abrupt drop in exports. USDA estimates an all-milk price of $15.05 per 100 lbs in 2010.
Forty members of the U.S. House supported the $350 million in aid in a letter to Appropriations Committee leaders. The House version of the USDA funding bill is silent on the issue.
In August, the Justice Department and USDA announced they will hold a series of joint workshops to look into buyer power and vertical integration of agricultural production and to discuss potentially anti-competitive conduct.
"It's not just dairy," said Deputy Agriculture Undersecretary Michael Scuse on Monday.