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.

Follow Samantha Hogan on Twitter: @SAHogan

Samantha Hogan is the state house, environment, agriculture and energy reporter for The Frederick News-Post.

(28) comments

DickD

Milk prices are very low right now. Last week Aldi was selling milk for $1.35 a gallon. Today the price is $1.99. Still a steal. Do you realize bottle water costs about the same and there's very little cost to bottling water. No feed, no milking, no vetinaries for cows that get sick, no acreage for food crops and pasture.

Farmers have always been Republican and they are mostly independent with little power to negotiate prices.

ma23464

Just so everyone here knows. Milk is not a true free market. Milk prices paid to farmers are set by USDA

Comment deleted.
shiftless88

Just pointing out how you support socialism all of a sudden. Odd.

pappyjoe

Thank you Mr. Hogan for watching the farmers back. When losing a farm that County Officials turn into jammed, packed, housing development I think its a win, win[smile]

shiftless88

Good to know you have become a socialist, Pappy! You gonna vote for Bernie for President again?

DickD

[lol]

hayduke2

And yet you probably go ballistic against other forms of welfare...

LeonardKeepers

my father was a dairy farmer and i never heard where he could tell people what he was going to charge for the milk he shipped. it was what where he shipped his milk what they were going to pay him for his milk. our farm was a small farm consisting of 124 acres and the most cows that he milked at any one time was 27 cows.

shiftless88

Ah, here you are just describing capitalism. He can try to sell his milk for whatever price he wants, just like every other producer of goods, but no one may buy it for that price. This is capitalism. Having the government backstop the price with money to farmers is socialism. Funny how all the conservatives are suddenly socialists when it comes to farm price supports.

public-redux

"Funny how all the conservatives are suddenly socialists when it comes to farm price supports."

Ahem.

matts853

Among other negative attributes, humans are self interested hypocrites. No one is immune.

public-redux

Not sure how your comment is relevant to mine.

public-redux

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.”

This is too vague to know what is actually being discussed. But it kinda sounds like an insurance program where one pays premiums and collects benefits in certain situations. For example, I've paid insurance premiums for fire insurance for my house but I've gotten nothing out of that insurance.

public-redux

"We’re not asking for a handout, we’re only asking for fair pricing,”

So its just like a fair price for labor. In other words, a $15 minimum wage is nothing more than asking for a "fair price". Got it.

shiftless88

I wouldn't be so annoyed with this if farmers actually voted consistently democrat, since they clearly are happy with some level of socialism but only if it helps them.

gary4books

I grew up on a farm in the Texas panhandle and was used to farm subsides. It seemed to be a smart move to stockpile food for "lean years." The Bible wrote of seven lean years and a food supply to tide people over. Better than starving. Who benefits from this support? Of course the dairy farmers do. But the customers do, too. Children benefit when their parents can afford healthy diets. This is just one part of a healthy diet, but an important one for many. Government exists to do what is difficult or impossible for individuals to do. Help for local business and agriculture to provide for the general good is not "socialism." it is just good common sense.

shiftless88

Actually, it benefits customers to have lower prices. Now customers pay twice; they pay the higher price for milk than market value, and they pay for it again with their taxes. How does this help customers?

public-redux

[thumbup]

Exactly.

gary4books

Think about it. Not always the same customer and the same tax payer.

shiftless88

You are a relatively poor person trying to buy milk for their kids; how does propping up the price of milk help?

gary4books

Who said the price paid for the milk by the consumer is increased?

DickD

Yes. But if the prices are too low some quit farming. Themore that quit, the less production and the future prices will be higher.

public-redux

Or there could be productivity improvements that would maintain production at a lower cost. You must have noticed productivity improvements in, say, solar energy.

LeonardKeepers

people think everything comes from a grocery store and have no idea about what it takes o get to get it to the store. a dairy farmer likes and needs to be paid just like anyone else that has a product to sell,only thing is he cannot put a price on his product like all the other people in business

shiftless88

why can't the dairy farmer put a price on his product?

FCPS-Principal

"We’re not asking for a handout, we’re only asking for fair pricing." No, it's a handout no matter what you call it. Business socialism. “For months we have been searching for a way to help our dairy farmers who are facing particularly challenging times." Golly, Guv, how much time have you been searching for a way to help all your citizens who are facing particularly challenging times? And have been for years and decades? Thought so. Business socialism. We're tired of paying for it and getting nothing out of it, as the lady says.

yogib

Right on FCPS. I too grew up as a dairy farm boy in Iowa and socialism saved my family many times through the 30s, 40s and 50s. Iowa farmers still receive millions of dollars of federal support which of course has the support of big ag like Cargill and ADM, because the money goes directly into their pockets. as an adult over the years, I saw people, even farmers rail about subsidies to the poor and unemployed while pocketing millions themselves. Glad to see the governor reaching down to help his farm constituency. I hope he realizes what is good for struggling farmers, is also good for struggling families and children in all corners of the state. Not just in the farm sector

public-redux

There sure are a lot of us former Iowa country kids around here.

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