Share this article

print logo

Washington's inaction threatens U.S. dairy farmers

The last 16 months have been the worst financially for U.S. dairy farm families in living memory. By some estimates, the equity loss for dairy farmers is equal to the actual value of the national dairy herd. Imagine, the value of all the dairy cows in the United States wiped off the books!

A logical reckoning of both operating loss and erosion of cow value for 2009 to U.S. dairymen comes in at a staggering $14 billion. This has wiped out decades of financial growth for dairy farm families. So far, 2010 is on track to be as bad or worse.

As it now stands, industry observers seriously question how America's dairymen are going to finance a new crop to feed their animals through the coming winter. With this enormous equity burn-down banks are going to find it difficult to extend credit even to the best amortized dairy operations.

Most farms are now at or approaching negative equity situations. Credit for these operations will be impossible.

Official Washington's reaction to the crisis? A $290 million appropriation that covered the dairymen's loss for first 10 days of the first month. Beyond that? Nothing. Nada. Zip!

For 16 months the U.S. dairy industry has been in free fall and everyone in D.C. is whistling passed the graveyard, hoping this disaster is going to right itself.

Blame for the matter lies with the asinine system used by U.S. Department of Agriculture to calculate prices paid to dairy farmers. The situation is well known in the halls of Congress. It has been the subject of numerous congressional hearings.

The U.S. dairy industry teeters on the edge of the abyss and all Washington can do is stand by and watch? This reluctance reflects nothing short of bad faith.

U.S. dairymen know they have been sold out by Congress to the interests of big business. While our members of Congress posture, pander and make much of the dairyman's plight, it's business as usual. If Congress had any intention of correcting this injustice, it would have done so long since.

Any talk of a solution speaks of the 2012 Farm Bill. That is two years hence -- two years before Congress will even discuss the matter, let alone work out a possible solution. If a sterling remedy is enacted, the first relief dairymen can expect is 2013.

Middletown, N.Y., cattle dealer Joe Distelburger, relates: "I spoke to a Western N.Y. bank lender with Farm Credit last night, who anticipates 20 percent failures from his accounts in the next 90 days."

If this estimate comes to fruition, this will foster unmitigated financial ruin throughout upstate, in epic proportion. In that eventuality, Western New Yorkers can lay blame directly at the feet of our delinquent House delegation and our U.S. senators. Prompt action on their part could have averted this needless disaster.

Nate Wilson is a retired dairyman from Chautauqua County.

There are no comments - be the first to comment