Iowa dairy farmers operating without federal safety net - KWWL - Eastern Iowa Breaking News, Weather, Closings

Iowa dairy farmers operating without federal safety net


When the federal Farm Bill expired in October, the programs that protect dairy farmers expired along with it.  A dairy industry without a farm bill could lead to much higher milk prices in the US.

For 24 years, Dale Gaul has been feeding his family by feeding his dairy cows and selling the animals' milk.

However, the drought this year plus other factors have driven up the price of feed.

"You went from $4.5 to $6 corn to $7.5 to $8 corn, and hay probably about doubled, the proteins about doubled," Gaul said on his dairy farm Wednesday afternoon.

He said he's in favor of market forces driving the prices of milk, but dairy farmers have, for decades, had the safety net of federal programs when milk prices plummeted. Until now.

"There's been various programs," ISU Extension and Outreach dairy field specialist Larry Tranel said, "like the CWT, where they pay farmers to sell cows, reduce production. There's been various supply management type schemes. There's been the MILC, the Milk Income Loss Contract... They would actually pay dairy farmers if milk fell below a certain price."

Tranel said all the programs that kept farmers safe in times of need expired with the Farm Bill in October.

"Dairy farmers are sitting there right now, thinking, you know, 'What's happening in the future? There isn't a farm bill, we don't have a safety net. We think we're going to have some kind of insurance program, but until the House and Senate get together and do some kind of Farm Bill, basically, when you take a look at the future of it, we're not exactly sure what's happening,'" Tranel said.

If the federal Government doesn't pass a new Farm Bill by January, the industry safety net will default to a program from the 40s that could effectively raise the price of milk to anywhere from $6 to $8 a gallon.

"I don't think it's real realistic because somebody's gotta do something," Tranel said. "I don't think they're going to let it revert back."

While crop farmers have more federal safety nets, dairy farmers such as Gaul know the dairy industry is different.

"It's roller coaster," he said. "It goes up, you catch your good years, and then you have your bad years. You just gotta ride them out."

It's an industry hoping for an uphill climb soon.

"There is a serious issue in the dairy industry right now," Tranel said. "We've got high feed prices, and there's a lot of reasons why we have high feed prices, and milk prices kind of need to respond to that."

In his weekly conference call with reporters Wednesday, Sen. Chuck Grassley urged Iowans concerned about the possibility of high milk prices to call their congressmen and tell them to pass the Farm Bill.

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