Kim Brayman wonders if she will profit this year from the 600 cows on her family’s dairy farm in Skaneateles.
“Milk prices are constantly changing,” says Brayman. “It is completely out of our control. If prices drop, there is nothing we can do to try and make more money.”
Brayman’s dairy farm is one of 665 farms in Onondaga County, according to the most recent United States Department Of Agriculture Census in 2007. And it is among the nation’s farms that benefit from federal government’s help subsidizing their income and insuring their losses. Congress is now debating the renewal of the farm bill, which is passed every five years.
President Barack Obama’s budget proposal for 2013 includes $32 billion in cuts over the next 10 years to the new farm bill. As the government looks for ways to reduce the deficit, both Democrats and Republicans agree that in the coming years, farmers will receive less support from the federal government. That’s partly because the agriculture industry has produced record profits over the last few years. Let’s take a look at the numbers from 2010:
- The agriculture industry made $92 billion — up $18 billion from 2009.
- There was $115.8 billion in exports, the most in U.S. history.
- The agricultural sector added $352 billion to the U.S. economy.
In the face of so much success and under pressure to reduce government spending, said Andrew Novakovic a professor of agricultural economics at Cornell University, Congress is likely to cut two payments to farmers: direct payments and counter-cyclical payments. Direct payments total about $5 billion every year and are given to farmers regardless of crop yields or market prices. Counter-cyclical payments are given to farmers each season after a particularly bad harvest.
The recent agriculture profits indicate, “corn prices absolutely skyrocketing,” said Novakovic. “When corn does well, typically all of the other crops do well to.”
But the picture is starkly different for dairy and livestock farmers. Higher crop prices can mean income for those farmers — but the crop prices are an expense for the livestock and dairy farmers who use those crops as feed. At the same time, dairy farmers are paying more for gas, fertilizer, labor and equipment, said Mike Marshfield a representative on the New York State Farm Bureau.
“Dairy farmers expenses have increased dramatically over the last ten years,” said Marshfield. That means dairy and livestock farmers still need more help in the federal farm bill. And they are a key part of the economy in Onondaga County.
Livestock sales accounted for 73 percent — or $100.8 million — of the $137 million total Onondaga County farm sales produced in 2007. Dairy was the leading agricultural product at 64 percent.
Dairy farmers rely on the farm bill’s insurance programs to deal with inconsistent milk prices using the Milk Income Loss Contract. Between 1995-2010 dairy farms in Onondaga County received over $7 million from the Milk Income Loss Contract program.
Crop farmers will rely on the crop insurance program. From 1995-2010 in Onondaga County, crop farmers recieved $3.2 million from the federal crop insurance program.
These insurance programs will “almost definitely” remain in the new farm bill, predicts Marshfield of the state Farm Bureau.
The farm bill’s payments are also meant to help farmers survive the ups and downs of their industry.
“You can’t compare agriculture to any other industry,” says Nicole Wood, legislative director at the National Grange, a lobbying group for farmers. “There are so many things that can change year to year. It’s very fragile.”
For renewing the farm bill, Congress has a Sept. 30 deadline. Cornell agriculture economist Novakovic predicts that bill could be delayed into 2013 as lawmakers are caught up in election-year chaos.
If Congress fails to renew the farm bill, Novakovic said, “That would be an astonishingly ugly situation.”
For her part, Skaneateles dairy farmer Kim Brayman works the farm that’s been in her family for 90 years. In 2009, the Brayman family farm received over $76,000 from the government program that makes up dairy farmers’ losses after milk prices drop. The farm still suffered a loss, Brayman said. But, she added, without the payment the losses would been even greater.
“I hate to admit it,” said Brayman. “But in 2009 without the government help from milk insurance our losses would have been doubled.”
(Ben Klein, a senior with dual majors in magazine journalism and political science.)