Dairy aid to help few in area

Milk prices paid to dairy farmers have bounced back after a year in the pits. Frank Faria inside the milking area at his dairy near Escalon, Thursday morning.
(Bart Ah You / The Modesto Bee)
Milk prices paid to dairy farmers have bounced back after a year in the pits. Frank Faria inside the milking area at his dairy near Escalon, Thursday morning. (Bart Ah You / The Modesto Bee)

WASHINGTON — The federal government Thursday rolled out a $290 million aid package for dairy farmers, but it might do little for those in the San Joaquin Valley.

The one-time payments will be capped at an estimated $19,200 per farm, so the valley's relatively large operations will see much less benefit to their balance sheets than the smaller farms in the Midwest and Northeast, industry people said.

"It's too little too late for a lot of people," said Frank Faria, who has 1,300 milking cows in the Escalon area.

The package, approved by Congress and President Barack Obama in October, aims to help dairy farmers deal with one of the worst slides in farm milk prices in memory.

The U.S. Department of Agriculture, in announcing rules for the aid Thursday, went against the wishes of California dairy leaders.

Michael Marsh, chief executive officer of Western United Dairymen in Modesto, said the payments can be "a help" but still fall short of the state's needs.

"Unfortunately, once again, it appears that the politicians in the Midwest have a little more sway in this program," he said.

Agriculture Secretary Tom Vilsack characterized the program as help "during these tough economic times."

Sen. Chuck Schumer, D-N.Y., called the announcement "the perfect Christmas gift to our dairy farmers."

The $290 million is part of the Dairy Economic Loss Assistance Program, which also includes a $60 million federal cheese purchase to help shrink the surplus of dairy products.

Dairy is the No. 1 farm sector in the Northern San Joaquin Valley, bringing an estimated $2.1 billion in gross income to farmers last year, according to county crop reports.

The prices plummeted around the start of 2009, as the recession reduced global demand for milk, cheese, butter and other products.

California farmers got an average of $1.48 per gallon of milk last year, according to one measure used by the state. In the first half of this year, they got 97 cents.

The California Department of Food and Agriculture estimated that a 700-cow farm, roughly the average in Stanislaus County, lost $59,500 a month from January to June.

Prices have improved this fall, thanks to growing demand and reduced supply, but they still are below many farmers' production costs, such as feed, labor and fuel.

The crisis will force about 10 percent of the state's farms to shut down by year's end, according to Western United Dairymen, and many survivors are relying on loans.

"The damage has been done," Faria said. "We've had $1 billion in lost equity just in California."

Sen. Barbara Boxer, D-California, had urged Vilsack to allot the money in a "regionally equitable" way.

"This is a clear example of going against congressional intent," Boxer spokesman Zachary Coile said Thursday. "This announcement does not meet the test of regional equity that was promised by the secretary."

The payments will be an estimated 32 cents per 100 pounds of milk, or 11.6 gallons. They will be capped at a maximum annual production of 6 million pounds for each farm, which works out to $19,200.

With the typical California dairy cow producing about 22,000 pounds of milk a year, this limit amounts to a herd of roughly 272 cows.

The state's average herd size is 825 cows. In Wisconsin, the nation's No. 2 dairy state after California, the average herd size is 87.

Bee news services contributed to this report.

Bee staff writer John Holland can be reached at or 578-2385.