December 22, 2012

Milk prices could double due to Congress' inaction

Congress' failure to pass a farm bill has Maine farmers and producers worried about wild price fluctuations.

By Eric Russell erussell@pressherald.com
Staff Writer

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Pingree is married to S. Donald Sussman, majority share owner of the Portland Press Herald.

Maine dairy farmers said they always want higher prices, but not for consumers.

Teresa Hardy of Farmington said that, as an organic farmer, she gets a locked-in base price. She's lucky. Others' prices rise and fall with the market.

"Some could be close to going out of business," she said.

Warren Knight of Smiling Hill Farm in Westbrook said he will be affected by inaction in Congress, but not as much as others because his farm processes its own milk so it maintains more pricing control.

Maine has more than 300 dairy farms, ranging from small herds to farms with hundreds of milk-producing cows. Collectively, they employ about 1,400 people. Another 2,600 work in processing plants and other dairy businesses.

Drake, of the Maine Milk Commission, said part of the problem is that the federal minimum price is determined largely by speculators on the floor of the Chicago Mercantile Exchange, where global commodity traders and speculators buy and sell cheese and butter futures. Farmers and others have long complained about the system.

The Maine Milk Commission can add to the federal minimum price, but if the price goes too high, it could lead processors in Maine to buy out-of-state milk.

Johnson, the Kittery dairy farmer, said fluctuations are bad for the industry.

It's like working all week and not knowing what your paycheck will look like at the end, she said.

 

-- Washington Bureau Chief Kevin Miller contributed to this report.

 

Staff Writer Eric Russell can be contacted at 791-6344 or at:

erussell@pressherald.com

Twitter: @PPHEricRussell

 

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