U.S. Dairymen......Sold Out
posted 3/20/2010

The last sixteen months have been the worst financially for U.S. dairy farm families in living memory. By some estimates, the equity loss for dairy farmers is equal to the actual value of the national dairy herd. Imagine, the value of all the dairy cows in the U.S. wiped off the books!

   A logical reckoning of both operating loss and erosion of cow value for 2009 to U.S. dairymen comes in at a staggering $14 billion. This has wiped out decades of financial growth for dairy farm families. So far, 2010 is on track to be as bad or worse.

   As it now stands industry observers seriously question how America's dairymen are going to finance a new crop to feed their animals through the coming winter. With this enormous equity burn-down banks are going to find it difficult to extend credit even to the best amortized dairy operations. Most farms are now at or approaching negative equity situations. Credit for these operations will be impossible.

   Official Washington's reaction to the crisis? A $290 million appropriation that covered the dairymen's loss for first ten days of the first month! Beyond that? Nothing. Nada. Zip! For sixteen months the U.S. dairy industry has been in free fall and everyone in D.C. is" whistling passed the graveyard" hoping this disaster is going to right itself.

   Blame for the matter lies with the asinine system used by USDA to calculate prices paid to U.S. dairy farmers. The situation is well known in the halls of Congress. It has been the subject of numerous Congressional hearings. The U.S. dairy industry totters on the edge of the abyss and all Washington can do is stand by and watch? This reluctance reflects nothing short of bad faith.

   U.S. dairymen know they have been sold out by Congress to the interests of big business. While our members of Congress posture, pander and make much of the dairyman's plight, it's business as usual. If Congress had any intention of correcting this injustice it would have done so long since.

   Any talk of a solution speaks of the 2010 Farm Bill. That is two years hence. Two years before Congress is even going to discuss the matter, let alone work out a possible solution. If a sterling remedy is enacted, the first relief U.S. dairymen can expect is 2013.

   Meanwhile, a prestigious agricultural lending organization purportedly predicts 20% of N.Y. dairy farms will be forced to close down within the next 90 days.

Nate Wilson is a retired dairyman from Sinclairville, Chautauqua County, New York.