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Ag chief: Help coming for dairy farms
By HOLLY RAMER, Associated Press
http://www.reformer.com/localnews/ci_12766915

Tuesday, July 7
CONCORD, N.H. -- U.S. Agriculture Secretary Tom Vilsack said Monday he will
soon announce a plan to make it easier for dairy farmers to take out new
loans or keep up with their existing payments.

Vilsack met privately with New Hampshire farmers and held a public forum at
an apple orchard as part of a nationwide tour on strengthening rural
America. He directed most of his remarks to dairy farmers, who have
struggled to survive at a time when what they're paid for their milk
doesn't cover the cost of production.

In New Hampshire, the number of dairy farmers has dropped from 500 five
years ago to 131 today. After talking to some of them Monday, Vilsack said
he told his staff to start assembling a commission to review the federal
milk pricing system as called for in the 2008 farm bill. In the meantime,
he said the agriculture department is working on a shorter-term plan to
help farmers obtain and maintain credit.

The plan, to be released in the next week or so, includes providing farmers
with operating loans at lower interest rates, reducing the principle of
outstanding loans or allowing farmers to forgo payments for a time, Vilsack
said. The agriculture department also is working with commercial lenders to
guarantee loans to dairy farmers, he said.

The price paid by dairy processors to farmers is set by the U.S. Department
of Agriculture based on commodity markets, which rise and fall with global
demand. Some

of the raw milk is processed into milk for stores as well as butter, yogurt
and other products for U.S. consumption. The rest becomes powdered milk,
cheese and whey for international and domestic markets.

Dairies increased production when demand for U.S. milk exports soared last
year, but once the global recession accelerated last fall, demand dropped,
farmers were left with too much milk and wholesale prices crashed.

Vilsack said his agency has tried to buoy wholesale prices recently by
releasing 200 million pounds of excess powdered milk to schools, food banks
and needy countries to reduce U.S. supply and accelerating payments to
farmers through the USDA's Milk Income Loss Contract program. Those two
efforts will amount to about $1 billion for dairy farmers this year.

"It is a tough time. We're going to do everything we possibly can to help
and assist," he said.

Beyond dairy farming, Vilsack emphasized how USDA funds dispersed through
the federal economic stimulus bill have helped New Hampshire with
everything from rural water systems to affordable housing. He won praise
from a town official in Barnstead, where USDA money is helping transform an
old sawmill into a pellet mill, but dairy farmer Sheldon Sawyer cautioned
that helping one group of farmers often hurts another.

"When government gives money indiscriminately ... it creates a problem," he
said.

Vilsack said he understood that concern, but ending government help wasn't
the answer.

"I wish the market were fair, but I fear that if that's all we had, we'd
have far fewer farms and much higher prices, and I think we'd have
significant discontent in this country," he said. "We've got the find the
right balance, we haven't found it in dairy, we've got to keep looking for
it."

Several of those who raised their hands during a question-and-answer
session after Vilsack's speech merely thanked him for various USDA
programs. A few came with criticism, including Shirley Tullar of Lyme, who
has 56 dairy cows. She asked him why USDA hasn't done more to limit the
importation of powdered milk protein and wasn't particularly satisfied with
his answer that the issue was on his radar but was very complicated.