PITTSFIELD – Dairy farmers across the country, including Maine’s 360 family farmers, are lobbying their congressional leaders because of perceived shortcomings in the 2008 Farm Bill.

They say outdated pricing policies and increased consolidation of the industry are putting their livelihood at risk.

Meanwhile, as retail prices for milk climbed steadily last month toward $5 a gallon, Maine’s two largest supermarket chains have dropped their prices dramatically.

Hannaford Supermarkets, with 51 stores in Maine, and Shaw’s, with 23, both have pledged not to charge above the state minimum retail price. That has brought a gallon of milk down to $3.63, which includes an 8 percent profit for the market.

Maine’s shrinking number of dairy farmers – down to 360 now – aren’t seeing a profit, however. The Federal Order, which sets dairy prices nationally, “does not reflect current prices and costs,” Maine Agriculture Commissioner Seth Bradstreet said Friday.

Milk is the only commodity regulated by the federal government, and the complicated pricing formula puts Northeast producers at a disadvantage, primarily because the farms are smaller and production costs are higher than in other parts of the country.

“Maine’s farmers are putting more money into making milk than they are getting paid for it, and that gap is growing significantly,” Bradstreet said.

According to the U.S. Department of Agriculture Economic Research Service, farmers’ cost of production is running nationwide between $17 and $27 per hundredweight, with Maine falling at the high end of the scale. Milk this month will be paid at $14.17 per cwt, down from $20 in November.

At the same time that Maine’s dairy farmers’ paychecks are shrinking, their costs for fuel, feed and fertilizer have increased anywhere from 50 to 100 percent.

Many farmers are joining an effort by the National Family Farm Coalition to shore up shortcomings in the 2008 Farm Bill. “The current Farm Bill completely fails our family farmers,” the coalition’s Paul Rozwadowski said this week.

“Our costs of production are skyrocketing … while our prices have gone down since last September,” Rozwadowski said. “Our broken dairy pricing policies and the concentration of our highly consolidated industry will further worsen … Congress’ failure to listen to our real farmers means we may soon find ourselves relying on powdered Chinese milk once all our local farms are put out of business.”

NFFC said three deficiencies within the Farm Bill include:

. An inadequate safety net: The current $9.90 per cwt support price, as well as a $16.94 price floor under the Milk Income Loss Contract federal program, is inadequate to balance costs of production.

. Forward contracting: This allows processors to pay below the minimum price to farmers and will further consolidate the industry. A USDA study of the Pilot Forward Contract program revealed that producers were paid $28 million less than if they had opted out of the forward contract.

. Federal Milk Marketing Order Review Commission: the National Family Farm Coalition states that an industry-stacked commission, rather than one favoring dairy producers, will lead to inequity in the pricing system and an attempt to degrade food product standards.

Also, a coalition of New England farmers and agricultural interests is objecting to comments during Farm Bill deliberations that categorized farms smaller than 20 acres as hobby farms and proposed amendments that would prohibit those farms from participating in government commodity and conservation programs.

“Any such limitation of participation has no place in the Farm Bill. It is punitive in nature and directed at the producers of food and fiber in the Northeast,” Marge Kilkelly of Dresden, director of the Northeast States Association for Agricultural Stewardship, said in a letter to congressional leaders.

“Maine has really held its own for the past three years,” Commissioner Bradstreet maintained, but he quickly added that dairy farmers are struggling.

Farmers traditionally get about $1.10 from each gallon of milk and yet store prices continued to rise dramatically over the past year. Bradstreet said this was pushed by greater transportation costs and the increased energy processors require.

Shaw’s and Hannaford both recognized the difficulty Maine consumers were having in balancing household budgets that included higher milk costs.

“Maine has seen commodity prices rising in recent months and consumers are starting to feel the pinch,” Carol Eleazor, vice president of marketing at Hannaford, said Friday. “In keeping with its ‘Every Day Low Price’ strategy, Hannaford wanted to help its customers by offering everyday low prices on the goods that consumers need and value most. Milk clearly falls into that category.”

Judy Chong, public information officer at Shaw’s, said, “Our lowered milk prices in Maine allow Shaw’s to provide additional value to our customers as we continue to evaluate the business and economic landscape to ensure that our stores are well-positioned to meet customer needs.”

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