CAMBRIDGE — Washington County dairy farmer Neal Rea, who has been heading the efforts of the 895-member dairy cooperative Agri-Mark Inc. for nearly a quarter of a century, said that the compensation dairy farmers receive is less than what it costs to produce milk.
And that’s why Rea, chairman of the Agri-Mark board, was pleased with recent changes to the 2018 Farm Bill, offering dairy farmers an opportunity to recoup more of their costs through an improved and lower-cost margin insurance program.
“We were pretty instrumental in helping the program,” said Rea in a Friday evening interview, referring to the legislative efforts of Agri-Mark, whose farmers own both the Cabot (Vermont) and McCadam (New York) brands of cheddar, butter and other dairy products.
“We will continue to seek ways that the federal government or individual states can generate income to help pay farmers a fair price for their milk,” said Rea.
Rea, who grew up on his family’s 550-acre Cambridge dairy farm, Reafield Farm, continues a nearly 80-year family heritage. And along with his wife, Carol, two sons and daughter-in-law, Rea milks about 275 registered Holsteins.
The new insurance program, Dairy Margin Coverage, administered by the U.S. Department of Agriculture, replaces the previous Margin Protection Program that was in the 2014 Farm Bill.
Scheduled to go into effect on Jan. 1, implementation of the DMC is behind schedule because of the 29-day government shutdown.
According to the USDA, margin protection insurance programs protect dairy producers by paying the difference between the national milk prices and the national average feed cost.
But because the guidelines have not yet been set for the new program, no one knows exactly how the new margins will be calculated.
“In the old program they based the margins on corn, soybeans and hay,” said Dave Holck, Washington County executive director of the USDA Farm Service Agency in Greenwich.
Holck said local dairy farmers have been calling the Greenwich office trying to find out about the insurance program and deadlines to apply for it.
“They will sign-up through the FSA. It is our job to receive the information,” said Holck. “But we have received nothing from the USDA yet.”
The changes to the 2018 Farm Bill should reduce premiums from the old insurance program substantially, up to 80 percent for small and medium dairy farms, and would cover up to 5 million pounds of milk.
“The premiums are supposed to be pretty reasonable and will cover up to 5 million pounds of milk,” said Rea, adding that a medium to smaller-sized farm with about 175 cows produces that much milk. “We are now actively working to find a way to improve farmer participation in the margin insurance program.”
Rea said that milk prices are determined on a national level and that many things drive milk prices including new non-milk products like almond and soy milk.
According to Holck, the USDA is offering a 2018 Farm Bill implementation listening session on Feb. 26 at 9 a.m. in the Jefferson Auditorium in the South Building located at 14th Street and Independence Ave. S.W. in Washington, D.C.
The listening session is open to the public. Participants must register at farmers.gov/farmbill link by Feb. 22 to attend the session. For those orally presenting comments at the listening session, written comments should be submitted by Feb. 22.