A silver lining on the country’s struggling milk market has finally appeared.
Despite low milk prices, Maryland dairy farmers had reason to be hopeful this week with a new federal milk insurance program preparing to roll out and Gov. Larry Hogan (R) announcing on Thursday a plan to help cover some of their additional costs. For the handful of dairy farms left in the state, it could be the lifeline that keeps them afloat until milk prices rise again.
“I think it’ll help us by giving us fair pricing for our milk. We’re not asking for a handout, we’re only asking for fair pricing,” said Barb Crum, who helps to run Venture and Luck Farm in Frederick County.
Her children are the eighth generation on the farm, which milks 105 Holsteins and sells milk to the Maryland and Virginia Milk Producers Cooperative. Every year the price of land, electricity and grain has gone up, but the sale price of milk has not.
Under the new Dairy Margin Coverage program created in the 2018 Farm Bill dairy farmers will now be eligible to increase their milk insurance from $8 to $9.50, meaning if the price of milk minus the cost of feed is below that margin, then the insurance will pay farmers the difference, said Colby Ferguson, government relations director for the Maryland Farm Bureau.
Based on current prices, the new coverage option could bring some farms $18 per hundredweight of milk, approximately 12 gallons. The $18 mark would allow many Maryland dairy farms to break-even or turn a small profit, Ferguson said.
The improved coverage would also increase insurance premiums $0.15 per hundredweight of fluid milk, but dairymen in Maryland won’t have to pay. Hogan announced Thursday he has committed $1.5 million to covering the additional cost, which should leverage an estimated $17 million of federal funds.
“For months we have been searching for a way to help our dairy farmers who are facing particularly challenging times,” Hogan said at the Taste of Maryland Agriculture dinner on Thursday. “I want all of you to be the first to know tonight that earlier today I made the decision to put additional state resources that will be combined with federal funds and will mean up to $17 million in emergency funding to assist and support our Maryland dairy farmers.”
Crum took issue with the suggestion by some lawmakers that they were “giving” dairy farmers money. She could remember previous programs her family paid into that never came back to help dairy farmers.
“We put money into it,” Crum said. “We got nothing out of it.”
The new program — which builds off the improved Margin Protection Program created in the 2014 Farm Bill — is widely considered to be positive. But despite Hogan’s commitment of state funds, farms will not be receiving a free ride as they will still need to pay fees and the rest of the premium.
Officially, the Dairy Margin Coverage program went into effect on Jan 1, however, the federal government shutdown has delayed the Farm Service Agency from implementing it. When Crum visited the Frederick County Farm Service Agency it was not yet accepting applications.
Still, the news set a positive tone at the Frederick County Farm Bureau’s annual meeting with federal, state and local leaders on Saturday. However, there were still problems with dairy, trade and regulations that needed to be discussed.
Staff from Sen. Ben Cardin’s office announced Saturday that the Congressman was speaking with the FDA in regards to the labeling of plant-based milk alternatives as “milk.” Cardin’s office is pushing the FDA to enforce its definition of milk, which is “the lacteal secretion ...obtained by the complete milking of one or more healthy cows,” Robin Summerfield, a field representative for Cardin’s office, told the Frederick County Farm Bureau.
“We’re on your side on that issue,” Summerfield said.
However, federal representatives had less information for local farmers on the outlook of international trade.
If no deal is reached between the U.S. and China in the next two weeks, then tariffs on $200 billion worth of Chinese goods is scheduled to rise from 10 percent to 25 percent on March 2.
China has responded with retaliatory tariffs on U.S. goods — including agricultural products — in the past.
Summerfield said a trade war would not be good for the U.S., but allowing China to abuse the U.S.’s intellectual property was also not correct. He punted responsibility from Congress to President Donald Trump’s administration to find long-lasting agreements on trade.
Perishable agricultural products, however, made the sit-and-wait solution unpalatable to some of the farmers in the room.
“We’re the only ones that suffer in the end. I think that’s the problem with this tariff thing,” said Raymond Ediger, who raises purebred beef cattle near Thurmont for breeding and market sales and rents land for corn and soybean production.
Edgier has personally seen prices for his cattle drop by half at all the local markets, Ediger estimated on Saturday.
“The price of cattle, the price of grains — have all been depressed. And the question is: is it because we lost the market? And, I think it is,” Ediger said.
He worried that if the trade disputes continue, then the U.S. will lose its market footholds. Then, they’ll be very difficult to get back.
Summerfield responded to Ediger’s criticism by saying even agriculture loses when countries don’t respect the U.S.’s intellectual property rights. He used the research and design of genetically modified crops — which have increased yields while decreasing disease and drought pressures — as an example of what is lost when another country steals technology.
The incentive to create the next innovation decreases when it can be stolen by another country on export, he said.
“It’s a critical issue not just for Silicon Valley but everything the U.S. invents,” Summerfield said.