Dairy’s Future Requires New Ways of Thinking

A Letter from Secretary of Agriculture Russell Redding

Like many of you, what is happening now in our dairy industry has me concerned, but I have faith that the strength and enduring spirit of our agriculture industry—especially our dairy sector—will see us through this crisis. As the recent economic impact analysis of Pennsylvania’s agriculture and food industries made clear, there are tremendous opportunities before us, and Pennsylvania’s leaders from Governor Wolf to the General Assembly and the Department of Agriculture are committed to helping dairy farmers affected by this tightening dairy market take full advantage of those opportunities, while helping them to manage in the short run.

I recently testified before the House Agriculture Committee on the current state of Pennsylvania’s dairy industry. I was joined by the Chairman of the Senate Agriculture Committee, Sen. Elder Vogel, whose background is in dairy farming, just like mine. During that session and recent budget hearings, I was asked by legislators what could be done to help.  One representative asked if the dairy industry is costing me sleep.

“Yes,” I replied, “it is.” I know the same can be said for many of you.

Like you, I wake up at nights wondering how we got here and what the future holds. We find ourselves in a market where milk prices are increasingly subject to global market forces; where there are limits to what the United States, much less one state like Pennsylvania, can do to balance supply and demand. The trend we’ve seen in Pennsylvania over the last two decades may continue if we lose dairy farmers whose cows go on producing in someone else’s herd, keeping downward pressure on prices while negatively impacting communities, farms, and related industries.

But we are not without hope and reason for optimism.

According to our economic impact analysis, Agriculture accounts for roughly 18 percent of Pennsylvania’s Gross State Product today, with an annual economic impact of $137.5 billion. The report found promising signs for dairy and a separate study of the state’s processing capacity potential was likewise encouraging. The bottom line is that there are opportunities, and that dairy will remain a key part of our agricultural sector for the foreseeable future, although the decisions dairy farmers and the commonwealth face over the next 12 to 18 months will significantly shape its prospects.

Dairy farms across Pennsylvania have a breadth of options and resources at their disposal as they consider their next step. Some of these options include:

The Center for Dairy Excellence for business tools to help manage production costs and optimize herd health;

Ideas for diversifying your operation and income sources or transitioning to organic products where demand is growing, but supply remains inadequate;

Potential financing options beyond traditional lenders;

Direct marketing services, as consumer interest in buying local is at an all-time high; and

Revisiting risk management programs, including the recently reformed Margin Protection Program.

The Department of Agriculture supports the commonwealth’s dairy farmers, and is committed to providing communities with the resources and connections they need to ensure that our dairy industry will thrive in the years to come. To be successful, though, will require new ways of thinking.

Perhaps Franklin D. Roosevelt said it best as the nation was searching for solutions amid the depths of the Great Depression, “It is common sense to take a method and try it. If it fails, admit it frankly and try another. But above all, try something.”

Those words of wisdom are particularly apt today as we find ourselves in these challenging times. Many dairy families are wondering how did we get to this point. Again, I say that you’re not alone. There are plenty of good producers out there who are facing the same hardships, the same questions, the same difficult choices you are. We’re at this point because of factors no one individual, organization, or government entity could control alone. It’s been a confluence of factors over nearly 20 years, but now that we’re here, one thing that won’t solve the problem is standing still, holding onto the past rather than planning and acting for the future. We’re committed to being here with you throughout that process.

 

Secretary Russell Redding

Pennsylvania Department of Agriculture

Crop Insurance News

PDA issued the following on Crop Insurance. Details: www.cropinsurancepa.com, 717/787-6901

  • Enrollment for the Dairy Margin Protection Program began July 1 and ends September 30.
    The program was established as part of the Farm Bill.
  • PDA will conduct an Early Riser on Crop Insurance August 19 at AG Progress Days.
  • The 15th Annual PA Crop Insurance Conference will be held in Harrisburg August 27.

Dairy Margin Protection Program Deadline Extended

USDA_logoOn December 4, one day before the original deadline, USDA announced that the application deadline for the Dairy Margin Protection Program (MPP) will be extended until December 19, 2014.  Established by the 2014 Farm Bill, the program protects participating dairy producers when the margin -difference between price of milk and feed costs – falls below the level of protection selected by the applicant.  USDA also urged agricultural producers to utilize an Internet resource, www.fsa.usda.gov/mpptool, to calculate the best levels of coverage applicable to their dairy operation.  PA Secretary of Agriculture George Grieg noted that producers should see that the cost is only a  $100 administrative fee in order to have a $4 margin that covers 90% of the farm’s annual production.  In addition to the Farm Services Agency (www.fsa.usda.gov ), PDA‘s risk management specialist, Jordan Stasyszyn may be reached at 717/705-9511 or jstasyszyn@pa.gov.

Ag Progress Days

Ag progress Days Crowd and Tents_0ROCK SPRINGS – The 2014 Penn State College of Agricultural Sciences AG PROGRESS Days August 12-14 in Rock Springs features a wide variety of programs, several of which are listed below.  (Complete listing at http://agsci.psu.edu/apd/events)

  •  Marcellus Shale: August 12 includes no fewer than five programs including Post-Leasing Issues for Landowners and Negotiating Natural Gas Pipeline Easements in Agricultural Land.  In addition, DEP will present a program on how Marcellus Shale natural gas resources are regulated as well as describing proposed revisions currently under consideration.
  • Public Policy: Farm Bill Dairy Margin Protection; Public Forum on 2014 Farm Bill and State of PA Agriculture; House Agriculture & Rural Affairs Committee Public Hearing.  These are all on August 13.
  • Conservation/Environment: USDA Agricultural Research Service is presenting a program August 14 on Riparian conservation for managed grazing lands.  It ties conservation objectives (habitat, nutrients, sediments) to agricultural production objectives (watering source, maximizing land productivity) with management options (moveable fence, flash grazing).ROCK SPRINGS

Member News & Notes

  • Center for Dairy Excellence announced that post-secondary students pursuing a dairy-related career can apply for one of seven $3,000 Student Leader Scholarships supported by the Center for Dairy Excellence Foundation and the PA Dairymen’s Association. Apply by June 1. Click here for more information.
  • PA State Grange has two youth camps scheduled this summer at Camp Sylvan Hills in Howard, PA: June 27-29 Youth Camp and June 30-July 5 Junior Camp. Details: 717/737-8855
  • PA Farm Bureau is taking registrations for its Fueling Agriculture & Cultivating Excellence (FACE) conference for young farmers at Bucknell University June 16-20. Details: http://www.pfb.com/images/stories/2014_FACE_YC_RegBochure.pdf
  • PA Assn. for Sustainable Agriculture’s seventh annual Bike Fresh Bike Local fundraising effort to connect consumers to locally grown food starts June 1 (Allegheny County), Details: www.pasafarming.org