Individual dairy farmers are likely to get anywhere from a few hundred dollars to $7,500 each in retroactive payments for the past five months — and thousands more over the next 3 1/2 years.

The payment plan is part of a national price support system for dairy farmers created in the new Farm Bill. It’s basically a broader version of the Northeast Dairy compact that expired last year. The House passed the bill Thursday and the Senate is expected to do the same this week.

Dairy payments would kick in when the price of fluid milk falls below a benchmark of $16.94 per hundred pounds. Farmers would receive compensatory payments dating to last Dec. 1. That would mean about $1,500 a month for a farm that produces 2.4 million pounds of milk a year — about 140 cows — according to the Food and Agriculture Policy Research Institute, at the University of Missouri. The bill caps benefits at 2.4 million pounds annually.

Scott Brown, a Research Assistant Professor at the institute, said dairy farmers would see an increase of 33 cents per hundred pounds of milk.

“It's about time they do something,” said Kay Henninger, who owns a dairy in Carlton, Minn., about 20 miles from the Wisconsin border. “It will be helpful. It won't put us over the top or anything.”

Henninger, who has 55 milk cows, stands to get about $500 a month for the past few months. “It's a truck payment,” she said.

Bob Cropp, a dairy policy marketing specialist at the University of Wisconsin-Madison, estimates dairy farmers across the country would make an additional $1.8 billion through 2005, when the bill expires.
Partially offsetting that, however, will be the extra supply of milk that the payments will stimulate, Cropp said.

“Milk prices will go a little lower, because some farmers will produce more than they would otherwise,” he said.

The six-state Northeast Dairy Compact, which set minimum milk prices above federal minimums, expired last September due largely to pressure from Midwestern states, who said it unfairly penalized their dairy farmers and consumers by raising milk prices.

For more information about how the new Farm Bill could affect your farm, check out the FAPRI analysis at:

Associated Press