Wednesday January 2, 2013

PHIL DEMERS

North Adams Transcript

ADAMS, Mass. -- One of the area's biggest dairy farmers saw little reason for optimism Monday, as negotiations on a new farm bill continued in Washington.

Victor Ziemba, of Broadlawn Farm on Walling Road in Adams, says the current cost of milk production handily outdoes revenue, and expects a "minimum" relief from Congress' solution, no matter which of several proposed routes it decides to take.

"Obviously, we hope to have a farm bill [to replace the expired 2008 bill]," Ziemba said. "But I don't know what it's going to be. The farmers won't have a say, in any case, so whatever they shove down our throats is what we're going to get."

With the expiration of the former five-year bill in September, milk prices could double within the month if lawmakers don't take action. A new bill is desired by agricultural lobbyists and farmers to replace the prior, but Congress has also put several "Band-aid" measures on the table.

But Ziemba says dairy farmers will hurt no matter the solution, and says the much-feared -- and reported -- $8-a-gallon milk price would actually reflect the cost of production.

He now receives roughly $20 per hundredweight (cwt.) -- around 12 gallons -- of milk, after spending $28 dollars to produce that amount.

"How long can we sustain that loss?" he asked.

Production costs are at a peak due to the comparatively high costs of two key commodities: oil and grain, the latter at a three-year high of $600 per ton.

Douglas DiMento, spokesman for Agri-Mark, a farmer's cooperative that works with Ziemba and over 1,300 other farms across New England, said the company's sole Adams client is hardly alone in its troubles.

In an interview with the Transcript on Monday, DiMento called the circumstances of many of Agri-Mark's clients "very desperate."

"In every sense of the word that's fair to say," DiMento said, adding that Agri-Mark is lobbying for protective measures for farmers.

"We're trying to find some low-cost solutions that will make Congress happy and at the same time do something meaningful for the farmers," DiMento said. DiMento's favored solution, and one still being considered by Congress, is the Dairy Security Act.

It's a collectivized insurance program for farmers to buy into that would pay the difference between the national average milk price and national average cost of feeding animals. The act is more broad than former measures, and would thus do away with former support programs for farmers like the Dairy Product Price Support Program, the Milk Income Loss Contract program and the Dairy Export Incentive Program.

If lawmakers can't agree upon a new five-year bill, or at the very least a one-year extension of the prior, 2008 bill, and nothing is done for several weeks, DiMento said Agri-Mark would indeed lobby for an increase in the price of milk.

"They need some kind of revenue increase to maintain operations," DiMento said.

While manufacturers and distributors have increased revenue over the years to meet inflation, Ziemba says, small dairy farmers wages have remained relatively stagnate for decades, forcing them to grow or die.

According to Ziemba, if the price of milk kept up with the price of inflation, it would be priced at roughly $42 a cwt. -- enough for him and others to make a comfortable margin of profit.