LEBANON — Dairy producers in Connecticut, stung by a drop in the wholesale cost of milk, are able to take advantage of a new federal program to protect their operations when prices plummet.
U.S. Sen. Chris Murphy, D-Conn., said it's important to get more farms in Connecticut to enroll in the program.
Murphy visited Graywall Farms Friday in Lebanon to tour the 950-acre farm's dairy production facilities and hear from owners Robin Chesmer and his son, Lincoln, about the challenges of running their dairy operation, which has 600 cows and produces 47,000 pounds of milk daily for the Farmer's Cow brand of products sold in Connecticut.
Called the Dairy Margin Protection Program, it provides dairy producers with payments when margins, the difference between the price of milk and feed costs, are below levels the producer chooses each year. The program was included in the 2014 federal farm bill and was first implemented late last year.
"This is really the first year that it's necessary, since prices have dropped so precipitously," Murphy said. "We need to make sure this program works not only on paper, but in practice."
Lincoln Chesmer said the farm is getting $17 per 100 pounds of milk sold. Last year, the farm made $25 per 100 pounds, he said.
"That's more than a 40 percent drop in a year," he said. "It's a tough situation."
Robin Chesmer said a slowdown in milk exports to countries such as Russia and China has created a milk glut in this country.
"They've cut back on their imports, and those decisions have an effect here," he said.
The U.S. Department of Agriculture program's focus is to protect farm equity by guarding against destructively low margins, not to guarantee a profit to individual producers.
Lincoln Chesmer said farmers in Connecticut often have lower margins than farms in the midwest, because the cost of feed is lower there.
The latest sign-up period opened July 1, and producers have until Sept. 30 to sign up for coverage. Participants pay premiums in order to benefit from the program.
"We're going to watch whether farms sign up this year. It only works if farms sign up," Murphy said. "Farmers are only going to sign up for the program if they're seeing payouts being made."
Murphy also said New England dairy farms typically suffer from average cost calculations that go into determining whether they qualify for federal aid.
"The average national cost is always going to be lower than what the cost of living, the cost of production is here in Connecticut," he said. "When you calculate a national number, it's never reflective of what the cost is here in Connecticut."
Murphy said he intends to join U.S. Sen. Richard Blumenthal, D-Conn., and U.S. Rep. Joe Courtney, D-2nd District, to talk with the Department of Agriculture about the possibility of adjustments to the calculation of "the true cost of farming in Connecticut."
Bryan Hurlburt, state executive director of the Farm Service Agency, said about 120 dairy farms operate in Connecticut, and all are eligible to sign up for the program.
"We're going to be working with (the dairy) industry and with the University of Connecticut to do outreach events like we did last year," he said.
Lincoln Chesmer said Graywall Farms participated in the program last year, but didn't need to use it due to the high price of milk at the time.