"Dairy farms have become an endangered
species," said Brown. "Here in New Jersey more than 45% of our dairy
farms have gone out of business in the last decade alone, leaving
just over 200 dairy farms in the state. If we want to save our family
dairy farms, immediate action must be taken." "During pre-dawn hours
dairy farmers are already milking their cows, seven days a week,
365 days a year, long before most of us are up and about," Brown
added. "It is not an easy or lavish life but one that makes us all
better off. It would be a real tragedy if we didn't take action today
that could mean the difference between saving our family dairy farms
or losing them forever." The action is based on analysis of producer
prices over the last several years and on testimony submitted by
dairy farmers, milk producer cooperatives, and milk processors at
last month's hearing concerning the need for emergency price relief
for New Jersey dairy farms. "Prices for Class 1 milk at the federal
level is simply insufficient to meet the basic costs of producing
milk here in New Jersey," Brown said. "With minimum milk prices set
monthly by the federal government, even minor fluctuations in price
raise havoc in a business with the kind of fixed capital investments
that characterize dairy farming." Brown noted that, even though some
have claimed that an increased base price to farmers would significantly
impact consumer prices on milk, the facts do not support the claim.
In November 1996, when average farm prices for Class 1 milk reached
a relatively high level of $18.29 per hundredweight, retail stores
adjusted their prices to consumers accordingly. However, by August
1997, the average base price had declined by 25 percent to $13.66
per hundredweight, its lowest price in over six years, yet prices
to consumers remained steady. Throughout this period, costs of production
have continued to climb for New Jersey dairy farmers. Despite increasing
on-farm efficiency and cost-cutting efforts and despite significant
increases in the quality of milk produced, it now costs dairy farmers
more per hundredweight to produce the milk than they receive for
it from processors. New Jersey dairy farms are important in maintaining
locally produced, high quality milk for consumption, supporting rural
economies, providing tax-paying open spaces and maintaining the aesthetic
value of rural New Jersey. Dairy farms account for more than 100,000
acres of New Jersey's rural open spaces. Brown noted that the crisis
in the dairy industry is nationwide in scope and has driven tens
of thousands of dairy farmers out of business all across the nation.
New Jersey's critical situation is
further complicated by the major federal milk marketing order reforms
mandated in the 1996 Farm Bill and by the potential for significant
changes at the federal level in the way milk prices are set.