N.C. farmers 'got milk,' seek stability

Milk farmers have been trying to stabilize their industry for years.

With national ads featuring celebrities such as Peyton Manning, Lindsay Lohan and Jason Kidd sporting the trademark white mustache, they've hoped to make their product a fixture in the lives of the public.

But the government has been in on the act as well. The 2002 farm bill created the Milk Income Loss Contract Program, which provides relief for farmers when milk falls below a certain price.

The MILCP has provided more than $17 million for North Carolina farmers since 2002, said Bob Gray, legislative director for the state's ratification committee.

For North Carolina, this assurance of stability in an uncertain industry is a necessity.

"(The state's milk industry) is in danger already," said Dewitt Hardee, a programs specialist for the N.C. Department of Agriculture.

The program expires in 2005, a fact that prompted Gov. Mike Easley and 13 other governors to send letters asking members of the U.S. House to extend the program within this year's omnibus appropriations bill.

The bill ultimately passed Congress without the provision.

In recent years, North Carolina has lost 40 percent of its milk production industry to states out west with larger farms and lower prices, said Geoff Benson, an agricultural and resource economics professor at N.C. State University.

"It was a program that benefited a very large number of North Carolina farms," he said.

Gray said that though the state's smaller farms are becoming fewer in number, there are still a lot of them - making the bill quite valuable.

Environmental issues have made it more difficult to begin a corporate farm out west, improving the market for family farmers in North Carolina, he said.

But the quintessence of the program isn't to level the playing field of the milk industry - it's designed to bring some stability to an unstable world.

"(Milk producers) have had an up-and-down roller coaster ride as far as economics is concerned," Hardee said.

Benson said the milk industry is particularly vulnerable because farmers usually are forced to sell their product every other day, while other farmers are able to store their crops for some time.

The bill helps to neutralize this cycle by providing a reimbursement of 45 percent for every cent the price falls below a certain level, Benson said.

For many milk farmers, the expiration of the bill would threaten their livelihoods. "They typically don't have other farm enterprises to fall back on," Benson said.

Though the efforts to extend the relief failed this year, advocates are hopeful that it could be extended.

"This extension will not be a part of the omnibus package that's being worked on right now," Gray said. Nevertheless, he said it likely will be renewed before 2005, in part because of the governors' letter.

Although most say the bill is good for North Carolina's farmers, its national worth is debatable.

Benson said it interferes with natural economics. While in most markets, low prices are cured by a reduction in supply, the milk bill encourages over-supply by keeping smaller farms from dropping out of the industry.

"It's the old economic adage: the cure for low prices is low prices."

Contact the State & National Editor at stntdesk@unc.edu.