Sponsorship

A.7113 - AUBERTINE, GUNTHER, RIVERA J, MAGEE, REILLY, DESTITO, DELMONTE, GORDON T, STIRPE, alessi, boyland, john, lifton, mceneny

Memorandum in Support

BILL NUMBER:A7113A

TITLE OF BILL: An act directing the department of agriculture and markets to conduct a study on the impact of hauling costs on dairy farmers

PURPOSE: The purpose of this legislation is to determine the financial impact of transportation costs on dairy farm income in New York State.

SUMMARY OF PROVISIONS: This bill would require that the Department of Agriculture and Markets study the financial impact hauling costs have on dairy farm income in New York State, and create a report based on the findings of such study for presentation at one or more hearings initiated by the United States Department of Agriculture relating to the drafting of the 2007 Federal Farm Bill.

Such study would include:

* A determination of the annual impact of hauling costs on dairy farm net-income for small, medium and large producers in the state over twenty production years;

* An analysis of the average price received per hundredweight by dairy farmers annually, adjusted for premiums, over a twenty-year period beginning on January 1, 1987 as compared to the average price received annually by recipients of milk beyond the farm over the same time period; and

* A determination of the potential financial impact on the New York State economy should milk hauling costs be absorbed by recipients of milk beyond the farm.

JUSTIFICATION: Milk transportation in the United States is almost entirely dependent on trucking. The ever-increasing costs associated with such transport inevitably translate into lower milk prices for dairy producers. When combined with high feed and on-farm energy costs, low milk prices and devastating natural disasters, these skyrocketing hauling expenses have squeezed profit margins almost down to zero for many farmers.

To date, little work has been done to determine just how extensively hauling costs affect a producer`s bottom line. The purpose of this bill is to allow the Commissioner of Agriculture and Markets to consult with dairy economists and other professionals in the industry to create a snapshot of how hauling costs affect farm income. As producers face the hard, life-altering reality of weighing existing debt against taking out yet another loan to get crops in the ground this spring, increased efforts are needed to take a closer look at how to best insure that New York remains one of the country`s top milk producers.

LEGISLATIVE HISTORY: New bill.

FISCAL IMPLICATIONS: It is estimated that the Department can absorb the costs of the study within existing budgetary resources. Much of the information required is available from the Department`s Division

of Milk Control, USDA`s Farm Service Agency and other entities that conduct economic dairy analysis.

EFFECTIVE DATE: Immediately.