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USA 09.02.2024

Maine Dairy Farmers Rally for Higher Price Amid Industry Struggles

Source: The DairyNews
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In a pivotal legislative hearing on Wednesday, numerous Maine dairy farmers urged lawmakers to endorse higher milk prices, a crucial move under a state relief program.
Maine Dairy Farmers Rally for Higher Price Amid Industry Struggles
The plea for increased price levels is prompted by the enduring challenges faced by the dairy industry, exacerbated by the impacts of the COVID-19 pandemic and escalating inflation.

The state's dairy sector has undergone a significant decline, shrinking from 4,600 farms in 1954 to fewer than 150 today, with major closures in recent years intensifying the industry's woes.

While the agriculture committee expressed support for the proposed bill by Rep. Bill Pluecker, I-Warren, the budget panel must greenlight the estimated $33.7 million fiscal commitment for this year. Despite the substantial cost, proponents argue that the measure would generate equivalent revenue, providing much-needed relief for struggling farmers.

The legislation seeks to elevate the minimum milk production prices, a three-year review process overseen by the Maine Milk Commission. The Dairy Stabilization "Tier" Program, initiated in 2004, aims to alleviate price fluctuations by offering financial assistance to farmers when market rates fall below the cost of milk production.

Heath Miller of the Maine Dairy Industry Association emphasized the urgency of adjusting prices due to the significant inflation spike during the pandemic. Proposed new rates suggest $28.90 for Tier 1 and $26.87 for Tier 4, with varying rates for mid-sized farms.

Despite official neutrality from the Maine Milk Commission and Gov. Janet Mills' administration, leaders from both entities, along with numerous farmers, emphasized the broader economic impact of dairy farms on various businesses and industries within the state.

Over 50 farmers filled the legislative committee room, with U.S. Sens. Angus King and Susan Collins underscoring the significance of Maine dairy in providing jobs and contributing approximately $1.9 billion to the state's economy.

Beyond the challenges posed by inflation, labor shortages, and increased input prices, farmers also face issues like corporate consolidation and contamination from PFAS chemicals. Pluecker, emphasizing the value of the tier program, acknowledged its role in preventing the accelerated closure of dairy farms, as indicated by past studies.

While the relief program has faced scrutiny, with critics, including former Gov. Paul LePage, citing artificial price boosts, farmers contend that survival and thriving are the goals, emphasizing the economic feasibility challenges faced by local operations.
Becky Smith
Becky Smith
Analyst (Livestock) AHDB
China is an important buyer on the world dairy markets, with a strong influence on global demand that plays into price dynamics. Imports of dairy products to China continued to decline in 2023, driven by increased domestic production and weaker consumer demand.
Keith Woodford
Keith Woodford
principal consultant at Agri food Systems Ltd.
Synlait is in big trouble with losses mounting up and no easy answers, says Keith Woodford. For much of the past 20 years, Synlait was an entrepreneurial player in the New Zealand dairy industry, with a strong focus on growth. For a long time, it seemed to be doing everything right.