PORTSMOUTH, RI - In an effort to help save local dairy farms, the jobs these farms create, and ensure Rhode Islanders have access to fresh and affordable dairy products, U.S. Senator Jack Reed (D-RI) today joined with Louis Escobar, owner of Escobar's Highland Farm, and Jim Hines, Executive Director of Rhody Fresh, to discuss new aid for Rhode Island dairy farms and how the public can help support the local industry.

Rhode Island's dairy industry is facing its worst economic crisis in 25 years. The recession has caused a steep drop in milk prices, even as the cost of feed and production remain high.

"Rhode Island dairy farmers have a rich tradition and make important contributions to our economy. They also help preserve open space and we simply can't afford to lose them. But due to the recession, it currently costs dairy farmers more money to produce milk than they could possibly make selling it. We need to ensure small family farmers can make a living," said Reed, a member of the Appropriations Subcommittee on Agriculture.

Milk prices paid to farmers have dropped to around $11 per 100 pounds, about $6 less than it costs to produce the milk, and down from $19 a year ago. The National Milk Producers Federation estimates farmers are receiving $1 for every gallon of milk they produce, while operational costs are about $1.50 per gallon. Meanwhile, supermarket prices have only dropped by about 15%.

Last month, Senator Reed and several of his colleagues wrote a letter to U.S. Secretary of Agriculture Tom Vilsack, urging him to use his authority to increase price supports under the Dairy Product Price Support Program (DPPSP). As a result, the U.S. Department of Agriculture (USDA) agreed to temporarily increase the price it pays for surplus dairy products, which will boost struggling dairy farmers' revenue nationwide by $243 million.

Under the new DPPSP guidelines, the price for nonfat dry milk will increase from 80 cents per pound to 92 cents (up 15%) and cheddar cheese blocks will rise from $1.13 per pound to $1.31 (up 16%). It is estimated that this federal aid will help purchase an additional 150 million pounds of nonfat dry milk and 75 million pounds of cheese.

"I was pleased to work with the USDA to help boost federal price supports to help struggling farmers get a fairer price for their product. This temporary increase allows the federal government to purchase excess milk in the form of nonfat dry milk, butter, and cheese. These goods are then stored until they can later be sold back into the market or donated to food banks and relief organizations to help people in need," stated Reed.

Before Congress adjourned last week, Reed also helped pass an amendment to the Agriculture spending bill that will direct $350 million to help farmers struggling during the dairy crisis. The amendment, which passed by a vote of 60-37, would allow the USDA to raise the support price for nonfat dry milk from 92 cents per pound to 97 cents per pound and cheddar blocks would go from $1.31 to $1.40 per pound. This language was not included in the House version of the bill and must now be reconciled in conference.

"Everyone can help support Rhode Island heritage farmers by buying locally produced milk, cheese, ice cream and other dairy products. It keeps money in the local economy and cuts down on pollution from shipping," concluded Reed. "Protecting our working farmland is critical to preserving Rhode Island's heritage and maintaining a diverse economy. I will continue working to ensure the federal government does its part to help Rhode Island family farmers remain competitive and productive."