Cows graze at Cherry Grove Farm, a dairy farm and creamery in Lawrenceville, N.J. (Photo by Dana DiFilippo | New Jersey Monitor)
A New Jersey Assembly panel advanced a bill Monday intended to help the state’s struggling dairy farmers as they face sagging milk prices, soaring operating costs, and pandemic stresses.
Under legislation approved by the Assembly Agriculture Committee, the New Jersey Department of Agriculture would reimburse dairy farmers for the annual premiums they pay to participate in the federal Dairy Margin Coverage Program.
That program acts like an insurance policy that protects farmers from losses when the difference between the national price of milk and the average cost of cattle feed falls below a certain level. It delivers effective risk protection for dairies with herd sizes up to 250 cows, and partial risk protection for larger dairies, according to Assemblyman Parker Space (R-Sussex), a prime sponsor. The average New Jersey dairy herd has 115 cows.
Ed Wengryn, a research associate from the New Jersey Farm Bureau, testified before the committee in support of the bill.
“Dairy farms in New Jersey have struggled for years,” Wengryn said. “New Jersey has higher overhead and expenses compared to some of our neighboring states, so this helps level the playing field.”
The legislation is “a small but important part of making sure when milk prices fall below the cost of production that the federal government will reimburse them for it,” he added.
The bill allocates $125,000 annually to cover the cost of premiums. The Senate version of the bill, sponsored by Sen. Steve Oroho (R-Sussex), passed unanimously last March. The bill is now headed for a vote before the full Assembly, which has just another week left to act before the current legislative session ends.
“Stepping up the support of our state’s dairy farmers is critical if we want to save this important industry,” Space said. “Milk producers, many of whom have been farming in New Jersey for several generations, are hurting from increased costs.”
The United States has lost more than half its dairy farms in the past two decades, a trend that has hit small farms especially hard, the U.S. Department of Agriculture reported last year. More farmers are reaching retirement age, while many others are consolidating operations with larger farms to save money, according to the report.
New Jersey has 50 licensed dairy farms statewide — down from hundreds years ago — although not all of them market commercially. Thirty-six farms ship milk commercially in New Jersey and produced about 91 million pounds of milk in 2021, according to the state Department of Agriculture and a fiscal analysis of the bill.
The pandemic posed new challenges for dairy farmers, driving many to dump milk when schools and restaurants closed and demand dropped.
The National Milk Producers Federation reported nearly $1.2 billion — a record high — will be paid to farmers under the Dairy Margin Coverage Program for 2021. Of that total, 31 of New Jersey’s dairy farms enrolled in the program last year and will receive almost $1.5 million, according to the USDA.
Farmers have until Feb. 18 to apply for 2022.
“This federal program has proven to be a successful safety net, especially for small dairy farms like we have in New Jersey,” Space said. “We want to encourage dairy farmers to enroll in the program and ensure that coverage costs are not an impediment.”
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