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Ag Bill Aids Hard-Hit Dairy Farmers, Not Consumers

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January 7, 2010

ST. PAUL, Minn. - The new year is starting out a bit brighter for Minnesota dairy farmers. Many have received one-time federal payments as a "fix" to help them get caught up with bills after a dreadful industry plummet in the past year. The Minnesota Farmers Union had a hand in pushing through the $290 million Dairy Economic Loss Assistance Payment or DELAP.

Milk prices also have started to improve. But Doug Peterson, Minnesota Farmer's Union president, says these industry improvements have not 'trickled down' to the grocery store shelves.

"If I were a consumer, I'd know - if supply and demand really works - that the price for the milk I'm feeding my kids every day should be coming down, but it's not. So there's some pig with his feet in the trough, as far as I'm concerned."

According to the U.S. Department of Agriculture, on average, the price dairymen received for milk marketed in summer 2009 was about half what it cost farmers to produce it.

Peterson says many dairy farmers are frustrated that the middleman is making all the profit.

"Those people that control about 80 to 90 percent of the fluid milk, and also the dairy cases in the supermarkets, they're still making tons of money, and they're not paying the farmer. That's the frustration."

Peterson says a higher average milk price for 2010 will provide dairy farmers with some hope, along with a better milk-to-feed ratio. He points out that it's not a great ratio, but has the promise of perhaps getting milk prices back to break-even levels for farmers.

Laura Thornquist, Public News Service - MN