Possible changes make local dairy farmers nervous

CORTLAND – News that a deal had been reached on extending the 2008 farm bill did little to ease nerves of a local producer and consumers.

Davis Denman, a diary farmer in Cortland, is bracing for a myriad of possible outcomes.

“I worked this morning shuffling things around to get to a position so if they do this we’ll be OK and if they do that we’ll also be OK,” Denman said Monday. “You can only plan for so many things, though, because you have a limited budget.

“Still, we tried to make it so, anything you can think of that might happen, we pretty much have it covered. If we don’t, we’ll have to back up and reorganize.”

The most likely scenario at this hour seems to be a one-year extension of the 2008 bill which expired in October. “If this extension passes, nothing will change for a little while,” Denman said.

However, those in the dairy business remain on edge. It is still unclear if U.S. House leaders would agree to put the extension up for a vote. If no action is taken, the Agricultural Act of 1949 will take effect, which contains basic provisions for setting milk prices.

This scenario would mean a higher profit margin for farmers to sell their dairy products to the government instead of the private market, which could set off a series of events that ultimately force milk prices to as high as $7 a gallon, according to experts.

“I’d be cutting back a lot on milk if that happened,” Sandy Weller of Cortland said as she picked milk off the shelf at Klingemier’s Sparkle Market in Cortland. “That is too much money. I’d have to limit my milk supply. I drink about a gallon a week and I live alone. But, I’m not paying $7 a gallon. I don’t know what I’d do. It is crazy.”

Georgann Haines of Cortland said she would have to change her shopping habits if milk prices doubled.

“My husband and I are both senior citizens and we’re on Social Security. We both drink milk and always have. We would probably have to just cut back on something else to make up for the price increase in milk,” Haines said. “We wouldn’t stop drinking it.

“Our tax dollars are paying those people in Congress and they are not doing their jobs.”

Chris Klingemier, owner of the Cortland Sparkle, echoed Denman’s sentiments regarding the uncertainty of the dairy industry.

“I cannot give you even the slightest guess. Nobody knows how this is going to play out. The expectations for the month of February was a slight drop in the price of milk,” Klingemier explained. “It fluctuates a very little bit from month-to-month.

“To pull the rug out from under it, nobody knows what’s going to happen.”

According to Klingemier, the only sure thing is high prices would be bad news for diary farmers across the country.

“When prices go up, consumption drops. It would be a disaster for dairy farmers, because at that price, people will look for a substitute,” he said. “That substitute would just destroy your dairy and your farmers. It is really that simple.”

Meanwhile, Denman continues watching and waiting for word of a new bill or an extension.

“I don’t think Congress will let this thing die without doing anything, because that would mean lost votes,” Denman said. “I am confident that something will get done. That seems pretty much like a given for everyone I talk to on the agricultural end.

“Beyond that, we just don’t know exactly what to expect. That’s the really scary part. As a farmer, you try to plan ahead, plan ahead, plan ahead. You even have to plan ahead based on the weather forecast, but the government is the only thing you can’t plan for, because you never know what they are going to do this afternoon.

“They can really screw you up.”

The farm bill talks come as negotiators are still at an impasse on averting a broader fiscal cliff combination of higher taxes and spending cuts today. Farm leaders had originally hoped to wrap the larger bill in a fiscal cliff deal.

One potential hurdle for the one-year extension is its cost: The nonpartisan Congressional Budget Office on Sunday estimated the extension, which also includes disaster assistance for farmers affected by drought, could cost more than $1 billion this budget year.

Republican Speaker of the House John Boehner has pushed back on passage of a new five-year farm bill for months, saying there were not enough votes to bring it to the House floor after the House Agriculture Committee approved it in July. The Senate passed its version of a farm bill in June. The farm bill, generally passed every five years, includes domestic food aid, farm subsidies and other help for rural areas.