The Missouri Dairy Association (MDA) has requested USDA Secretary Thomas Vilsack to immediately reinstate increased price supports for cheddar block and barrel cheese and non-fat dry milk for a period of at least six months.
USDA established higher levels of $1.31 per pound for cheddar cheese, $1.28 per pound for barrel cheese and $.92 cents per pound for non-fat dry milk temporarily for a period from last August 1 to October 30.
In a letter to Secretary Vilsack, MDA President Larry Purdom of Purdy pointed out that "2009 was the worst year for dairy farmers in 25 years, and Missouri's dairy farmers are still reeling from the effects of those plunging dairy prices. We have borrowed up to our eyebrows to make it through and now we are faced with tightening credit at a time when we need it most--spring planting.
"With the decline in cheese prices, lenders and other input suppliers are unwilling to loan additional money to dairy farmers--which may force these farmers to go out of business if they can't buy seed, fertilizer, fuel and other inputs for spring planting," said Purdom.
"When prices supports were increased last year, it had a profound and positive impact on the market place at little if any costs to the federal government. The prices for cheese and non-fat dry milk have been extremely volatile over the last several months and have fallen dramatically recently. There is no positive news for dairy demand only a growing inventory of cheese estimated at over 900 million pounds.
"This does not bode well for dairy farm prices and could lead us to another disastrous year," said Purdom.
"When USDA increased the support price for cheese by $0.18 per pound on August 1, 2009, the "market" incorporated that new benchmark and raised market prices without any cheese being sold to the government at the higher price. MDA believes the same situation would likely occur today.
"MDA joins the broad range of support for this action already shown by the Northeast Dairy Farmers Cooperatives and the Alliance of Western Milk Producers,” concluded Purdom.