Dairy farmers expected to receive compensation soon

MONTPELIER — Vermont dairy farmers by the end of next week are expected to receive their first checks under an emergency price support program implemented by the state in late June.
Officials at the Vermont Agency of Agriculture explained this week that under the Vermont Target Price Program (VTPP) they will pay dairy farmers 99 cents per hundredweight for milk they sold in June. The $8.6 million VTPP fund was created by Gov. James Douglas and the Vermont Legislature in late June to help dairy farms handle the losses caused by the combination of bad weather, high fuel prices and low milk prices.
“It’s definitely going to help,” said Ferrisburgh dairy farmer Ray Brands. “Right now, the prices are at their lowest point.”
Farmers were selling their milk for at least $16 per hundredweight at the beginning of 2005, but they’ve seen that price fall to $12 or less in the intervening months.
The 99-cent VTPP rate was slightly lower than agriculture officials originally anticipated. The size of the subsidy is being set each month based on the difference between a $14 per hundredweight target and the actual prices paid by milk buyers. Agency of Agriculture officials earlier said the subsidy would be $1.07 per hundredweight, but more up-to-date data brought it down to just under a dollar, according to Diane Bothfeld, the dairy marketing specialist with the agency.
VTPP payments will be sent to farmers each month until the fund runs dry, which is expected to be about five months, according to Bothfeld.
Steve Kerr, Vermont’s secretary of agriculture, saw some good news in the lower-than-expected rate this month. “That will help this money last longer,” Kerr said.
Another effect of a low initial rate is that slightly less of the state’s money will go to large farms.
Payments are capped at 4.8 million pounds per individual farm, after which point the farmers won’t receive any more money under the VTPP program. Most farms will not reach that amount during the duration of the program, but a few will produce that much in only two or three months, Bothfeld said.
For those farms, a low rate before they reach the cap means less total money from the government.
The VTPP was created to combat a crisis situation for Vermont farmers, caused by a “perfect storm” of an unusually wet and cold year so far, in addition to lower-than-usual milk prices and higher-than-usual operating expenses. According to Bothfeld, improved weather in the summer has helped farmers, but they aren’t out of the woods yet. “It has dried out considerably,” she said. “But the question is, what’s going to happen in the fall?”
Dairy farmer Brands estimated that his operation will probably take five to six months to reach that 4.8 million pound limit. But large or small, he said the program would provide welcome relief to all dairy farmers. Most farmers will have to use the money right away for day-to-day expenses, he figures.
“It’s going to go right out to offset expenses,” Brands said.

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