Dairy Price Floor Program Proposed by Senator

The “Dairy Farm Sustainability Act” would create a price floor for milk and would trigger payments when prices drop. ( Wyatt Bechtel )

Legislation proposed by Senator Kirsten Gillibrand (D-NY) might be a solution to milk price instability.

In a conference call on Mach 13, Gillibrand debuted the “Dairy Farm Sustainability Act” which establishes a price floor for milk. It would be similar to already existing programs like the U.S. Department of Agriculture's Price Loss Coverage utilized by corn and soybean farmers.

The price floor would be set at $23.34/cwt and would adjust with inflation over time. Farmers would receive 45% of the difference between the milk price floor and the current all-milk price.

For instance, if milk prices were $16/cwt, the difference would be $7.34/cwt. Payments to farmers would then be $3.30/cwt.

“Historically low milk prices are creating a crisis for our farmers and dairy communities, and Congress needs to fix this problem now. My new bill, the Dairy Farm Sustainability Act guarantees a minimum price for dairy farmers, to ensure that our farmers don’t go bankrupt every time prices drop,” Gillibrand says.

Dairy farms could still participate in the Margin Protection Program (MPP) when milk prices are above the price floor. MPP-participating farms would be eligible for payments from the Dairy Farm Sustainability Act on up to the first 5 million lb. of production.

“Farmers can’t just turn their production on and off when the price of milk changes. Which means our dairy farmers have been forced to accept low prices for too long,” Gillibrand says.

The Dairy Farm Sustainability Act would be included as a provision in the new five-year Farm Bill being drafted in the U.S. Senate Agriculture Committee. Gillibrand sits on the Agriculture Committee and her home state of New York has more than 4,000 dairy farms.