Reed & Colleagues Urge USDA to Protect Dairy Industry From Financial Crisis

WASHINGTON, D.C. – In an effort to protect dairy farmers in Rhode Island and across
the nation amid the dairy industry’s current financial crisis, U.S. Senator Jack
Reed has joined 60 other lawmakers in writing a letter to U.S. Secretary of
Agriculture Tom Vilsack asking the U.S. Department of Agriculture (USDA) to aid in
the expansion and maintenance of domestic dairy markets.

The price of farm milk has dropped forty percent since 2014, and in May, the
nation’s cheese stocks were recorded at their highest level since this data was
first recorded in 1917. Low farm milk prices have resulted in sharply reduced
incomes, placing the nation’s dairy industry in a vulnerable position. In the
letter, Reed and his colleagues encouraged the agency to use its secretarial
authority, granted under the Commodity Credit Corporation Charter Act, to protect
the nation’s dairy farmers from further crisis by both aiding domestic markets and
encouraging domestic consumption of dairy products.

«We are deeply concerned that U.S. dairy farmers, who are a key part of our
agriculture community and agriculture economy, are in greater need of stability and
support as they face these significantly lower prices, which for some are below
their actual cost of production,» Reed and his colleagues wrote in the letter. «As
this industry is reeling from low prices, a glut of imports, challenges in our
export markets, and poor economic growth projections, we urge the USDA to use its
secretarial authority under the Commodity Credit Corporation Charter Act (15 U.S.C.
714c), Section 32 of the Agricultural Adjustment Act of 1935 (7 U.S.C. 612c), and
look to past precedent for how to take action to protect all of our nation’s dairy
farmers from further crisis and to aid in the expansion and maintenance of domestic
markets. We encourage USDA to take any and all actions available in order to make
an immediate market injection and offer financial assistance that will directly
support U.S. dairy farmers equally, while being cautious to not stimulate
overproduction further.»

As a member of the Senate Appropriations Committee, Senator Reed has worked for
years to advocate for Rhode Island’s farmers, fishermen, and other food producers.
In 2014, in an effort to strengthen the state’s agriculture, food businesses, and
economy, he hosted USDA officials at a grant workshop for local farmers and food
producers to outline available federal funding opportunities and loans.
The full text of the letter is below:
The Honorable Tom Vilsack
Secretary of Agriculture
1400 Independence Avenue, S.W.
Washington, D.C. 20250
Dear Secretary Vilsack:
We write today to express our concern about the troubling economic challenges facing
U.S. dairy farmers and the entire U.S. dairy industry. We have seen farm milk prices
drop forty percent since 2014 and in May the nation’s cheese stocks were recorded at
their highest level since the data was first recorded in 1917. Current expectations
are that the dairy market will continue to struggle with depressed prices and we
seek your help as we search for ways to swiftly assist our nation’s struggling dairy
farmers.
Our dairy farmers have been hit extremely hard by low farm milk prices that have
resulted in sharply reduced incomes, which is placing our nation’s dairy industry in
an extremely vulnerable position. A number of factors have contributed to this
crisis. U.S. milk production has increased almost two percent above last year’s
level, while global milk production is up significantly, partly as a result of the
European Union’s decision to remove its milk production quotas and the loss of their
export market to Russia. Furthermore, we are seeing an increase in production in
other major milk-producing countries that have led to these depressed prices
globally. All of this comes as our dairy farmers are still adjusting to the new Farm
Bill, and the many changes that were made to our dairy support programs.
We are deeply concerned that U.S. dairy farmers, who are a key part of our
agriculture community and agriculture economy, are in greater need of stability and
support as they face these significantly lower prices, which for some are below
their actual cost of production. As this industry is reeling from low prices, a glut
of imports, challenges in our export markets, and poor economic growth projections
we urge the USDA to use its secretarial authority under the Commodity Credit
Corporation Charter Act (15 U.S.C. 714c), Section 32 of the Agricultural Adjustment
Act of 1935 (7 U.S.C. 612c), and look to past precedent for how to take action to
protect all of our nation’s dairy farmers from further crisis and to aid in the
expansion and maintenance of domestic markets. We encourage USDA to take any and all
actions available in order to make an immediate market injection and offer financial
assistance that will directly support U.S. dairy farmers equally, while being
cautious to not stimulate overproduction further.
The family business of dairy farming has long been woven into our nation’s
agricultural history. Across the country, in all 50 states, dairy farms large and
small are economic drivers providing local jobs and local products. During the 2009
dairy collapse, we saw far too many families have to sell off their cows and close
the doors for good. Through the support of USDA, we can hopefully prevent many farms
from needing to make that same difficult decision today and we hope you will work to
support all of our dairy farmers across the country.
We look forward to working closely with you in determining the best course of action
to take in managing the current dairy industry financial crisis. Thank you for
taking the time to address this important matter.