AUGUSTA (AP) – In a fresh blow to Maine dairy farmers, a legislative panel is recommending a $4.8 million cut in price supports for milk.

Tuesday’s proposal by the Agriculture, Forestry and Conservation Committee comes on the heels of predictions earlier this month that milk prices are crashing and could, within two months, be roughly half what farmers received a year ago.

“This is the perfect storm for dairy,” Julie Marie Bickford of the Maine Dairy Industry Association said. “All our farmers are squeezed to the breaking point.”

The recommended reduction in subsidies represents about 37 percent of the amount officials say would be needed to fund the program during the coming fiscal year.

The state Department of Agriculture was asked to cut $4.8 million to help close the state’s looming budget gap.

Pittsfield dairy farmer Walter Fletcher had planned for his son to return to Maine from his out-of-state career and expand the farm by adding 100 cows to the herd of 200.

The state subsidy “provided that safety net, a way for the younger generation to start or continue in dairy farming. I’m not sure now,” he said.

Leon Graves of Dairy Marketing Services, which represents dairy cooperatives in the Northeast, told last week’s Maine Agricultural Trades Show that lack of international demand could push prices down by 50 percent and a rebound may not come until September.

Producer prices prices per hundredweight for last June were $19.56. A price of $11.54 is predicted for March. A soon-to-be-released study by the University of Maine pegs the cost of production for milk in Maine at $24.50 per hundredweight.