Churning Out Dairy Reform Is Gillibrand’s Bread and Butter; New York Dairy Industry Supports Tens of Thousands of Jobs and Generates Nearly $3 Billion in Revenue Annually
Today, U.S. Senator Kirsten Gillibrand is announcing her dairy priorities for the upcoming 2023 Farm Bill negotiations. A leading champion for New York’s dairy farmers, Gillibrand is announcing the reintroduction of her bipartisan Dairy Pricing Opportunity Act, which would empower dairy farmers to be key players in reviewing proposals that could change Class I milk pricing by requiring the United States Department of Agriculture to hold national hearings to review Federal Milk Marketing Orders (FMMO). The current milk pricing system is one of the most complicated and out-of-date economic systems in our nation, leaving many of New York’s dairy producers facing the risk of inadequate pay due to volatile milk pricing. Senator Gillibrand is also announcing her recent letter to U.S. Trade Representative (USTR) Ambassador Tai with Senator Schumer pushing the agency to ensure that Canada upholds its dairy trade obligations as part of the U.S.-Mexico-Canada Agreement (USMCA). Unfair Canadian trade policies have kept America’s dairy producers from benefiting from fair trade to the Canadian market for their products.
“As we prepare for the 2023 Farm Bill, it is one of my top priorities to ensure our dairy industry stays competitive in the global economy and to meet the growing needs of New York’s dairy farmers. Dairy is New York’s primary agricultural product, but our outdated milk pricing system is doing substantial harm to the industry and our dairy farmers are struggling. We have the unique opportunity with the upcoming Farm Bill to modernize our milk pricing system and let dairy farmers be key players in guiding this critical reform,” said Senator Gillibrand. “I will also continue to push Canada to uphold its side of the bargain under the USMCA and protect American dairy farmers from harmful trading practices. Fair market access for American dairy farmers was a key pillar of the USMCA, intended to expand market opportunities for America’s dairy industry and create an equitable playing field for producers across the country. These principles must be upheld.”
Senator Gillibrand first introduced the Dairy Pricing Opportunity Act in 2021 with Senators Leahy (D-VT) and Collins (R-ME). The introduction of this bill was a direct result of Senator Gillibrand’s 2021 Senate Agriculture Subcommittee hearing on modernizing milk pricing and the FMMO system, and has paved the way for critical discussions surrounding FMMO reform in not just Class I pricing, but potentially other areas of need. New York is the fifth largest dairy-producing state in the nation and home to nearly 3,500 dairy farms. Senator Gillibrand is a longstanding advocate for these farmers and has consistently worked to reform the FMMO system, which forces American dairy farmers to contend with potentially volatile milk prices and poor pay. These challenges, in addition to rising costs and intensifying competition, have forced many small dairy farmers to leave the industry. The U.S. has lost nearly 60% of its licensed dairy operations since 2003, and in New York the number of dairy farms declined from 4,190 to 3,430 between 2018 and 2021 – a loss of approximately 18%.
Prior to the 2018 Farm Bill, Class I milk was calculated using the “higher of” Class III or Class IV price plus the applicable Class I differential. This was changed in the most recent Farm Bill to an averaging method of Class III and Class IV plus $0.74. This change, compounded by government intervention in cheese markets as a result of the pandemic, has resulted in hundreds of millions of dollars in lost income for dairy farmers from May 2019 through April 2021. This combination of factors demonstrates that when there is a wide discrepancy between the Class III and Class IV price, the current mover will cause significant loss of Class I skim milk revenue relative to the previous Class I mover and what was intended by Congress in the 2018 Farm Bill change. This has led to increased calls from producers and industry for USDA to hold national FMMO hearings to resolve this issue with the Class I mover.
During the 117th Congress,the Dairy Pricing Opportunity Act was endorsed by the American Farm Bureau Federation, New York Farm Bureau, American Dairy Coalition, the Maine Dairy Industry Association, and the Northeast Dairy Producers Association.
Gillibrand has consistently pushed to enforce key provisions of the USMCA for dairy farmers and Canadian dairy exports. In a 2020 letter to U.S. Department of Agriculture (USDA) Secretary Sonny Perdue and USTR Ambassador Robert Lighthizer, Gillibrand and more than 20 Senate colleagues pushed the administration to hold Canadian and Mexican trade partners accountable to their commitments. The outlined provisions are crucial to creating a level playing field for dairy farmers in New York and across the country.
For Gillibrand’s 2023 letter to USTR, please click here.