MORRISVILLE – With fluid milk prices less than half of what they were a year ago, our nation’s dairy farmers are in crisis.

“These are serious times,” said David Rama, one of the organizers of a conference held on Friday at Morrisville State College which brought more than 200 farmers, vendors and consumers together to discuss the ramification of and possible solutions to the plight of the dairy industry.

After 30 years working with dairy farmers as an auctioneer, Rama said he’d never witnessed anything like what he’s seeing in the industry today.

“This is nationwide,” he said. “We’re talking about the systematic destruction ... and annihilation of an industry.”

Dairy’s problems stem from two issues, according to Rama and others who presented during the one day event. The first is the way in which milk prices are set on the Chicago Mercantile Exchange. The second, related to the under-regulated importing of milk protein concentrates which displace domestic dairy products and threaten the safety of our food system, he explained.

According to John Bunting, author of a whitepaper titled “The Dairy Farm Crisis 2009,” supply and demand are not factors in milk pricing. Rather, the price of milk is tied to the price set for block cheddar cheese on the Chicago Mercantile Exchange. This is not a true market, he explained, because there are “so few purchasers, that the activity of any one purchaser can affect the entire market.”

“This is a complex problem,” Bunting reported, explaining that production, and therefor supply, of fluid milk is also skewed because of external capital investment in certain areas of the country, particularly the Southwestern United States and California. And the problems have been further compounded by the worldwide financial crash last year which “eliminated both buyers and credit in some countries and the short term credit necessary for producers to function,” he explained.

Increased imports of milk protein concentrates, and the substitution of caseins and caseinates in cheese and other dairy products have only exacerbated the problem. MPC’s, which are used in making adhesives, are not classified as food products and therefor do not fall under the same import regulations as other imported dairy products.

In some cases, where these products are actually produced is a mystery. According to Bunting, one of the largest exporters of MPCs is Singapore, which does not have a domesic dairy industry.

The crisis is very real for dairy farmers, as many as 70 percent of whom are being forced to rely on credit to cover daily operating expenses, Bunting said. If those farms go under, it will cause further repercussions in the U.S. economy.

“Once you lose a farm ... it doesn’t come back,” said Chenango County Farm Bureau President Bradd Vickers, adding that the effects are devastating, not just for that individual farm family, but also for the community as a whole.