FOR IMMEDIATE RELEASE June 30, 2000

SCHUMER, CLINTON: NORTHEAST DAIRY COMPACT TAKES STEP FORWARD IN CONGRESS

Senators introduce bill in Senate to expand compact to include New York

Milk Compact would stabilize volatile milk prices, farmers' incomes
US Senators Charles E. Schumer and Hillary Rodham Clinton today announced that their efforts to expand the Northeast Interstate Dairy Compact to include New York have taken another step forward in Congress. Schumer, Clinton and others introduced a bill last night re-authorizing and expanding the Compact - a measure that helps protect dairy farmers from price fluctuations.

"Our dairy farms are family businesses, and the very backbone of rural life in Upstate New York. But fluctuating milk prices have been forcing more and more of them out of business," Schumer said. "Like any other industry, dairy producers need stable prices in order to manage their businesses and stay afloat. Expanding the Dairy Compact to include New York would help stabilize dairy farm incomes and enable farmers to plan for the future."

"From Watertown and Glens Falls to Ithaca and Jamestown, New York's farmers and New York farms are a vital part of our state's economy and its landscape. Yet, all around the state, dairy farmers are working harder and still struggling to make ends meet," said Clinton. "That is why it is so important that Senator Schumer and I join with our colleagues from other states in support of this legislation, which would expand the Northeast Dairy Compact to include New York."

Low milk prices forced 240 New York dairy farms out of business last year and sent dairy farm incomes to their lowest levels since 1978. Since 1997, about 1,500 dairy farms in New York have closed, decreasing the state's milk production by 2.5 percent in the last year.

The Northeast Dairy Compact helps struggling farmers by boosting milk prices above federal minimums. A commission appointed by the Compact's members sets a minimum price for the fluid milk sold to processors above the federally mandated level. The difference between these two prices is then collected by the commission and distributed to farmers.

Last year, these payments totaled over $18,000 to individual farmers living in the six states - Connecticut, Maine, Massachusetts, New Hampshire, Rhode Island, and Vermont - that comprise the Compact. If New York had been a member last year, its 7,000 dairy farms would have received an estimated $132.6 million in payments - an average of $18,200 for each farm, thereby increasing income for the average dairy farm in the state by approximately eight percent.

The bill Schumer and Clinton introduced in the Senate yesterday would expand the Compact to include New York and four other states and would make it permanent. The current Northeast Compact is set to expire in September if Congress does not re-authorize it. In addition, it would create a separate 14-state Southern compact.

Schumer and Clinton said the Dairy Compact does not significantly raise the retail cost of milk, and may even prevent sharp price hikes in the future. A recent study by the US Department of Agriculture (USDA) showed that the Northeast Compact was responsible for only 4.5 cents of a 29- cent increase in the price of milk that occurred in New England since July of 1997. Prices in compact member states have been relatively stable compared with those in other areas, such as Chicago, where there was a 90-cent increase over the same time period.

"The long-term solvency of New York's dairy industry, and the lives of thousands of family-run dairy farms across our state, relies in large part on Congress' quick approval of the Compact," Schumer said.

"Expanding the Dairy Compact is the right thing to do - it will not only ensure the security of New York's dairy farmers, but also guarantee an adequate supply of fresh milk at reasonable prices and help preserve our precious open spaces," Clinton said.

The Northeast Interstate Dairy Compact Re-Authorization and Expansion Act of 2001 is sponsored by Senators Arlen Specter (R-PA), Mary Landrieu (D-LA), Susan Collins (R-ME), Schumer, Olympia Snowe (R-ME), Patrick Leahy (D-VT), Thad Cochran (R-MS), and John Breaux (D-LA).

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