Better Price Safety Net
Needed for Dairy Farmers
MADISON (May 26, 2006) - The federal dairy program needs to eliminate regional pricing schemes, and should include a better price safety net for dairy farmers, according to the president of the Wisconsin Farm Bureau Federation, Bill Bruins.
Bruins will offer this perspective at a public hearing to review the state of the Upper Midwest dairy industry that will be held on May 31 in Winona, Minnesota by the House Agriculture Committee’s Subcommittee on Department Operations, Oversight, Dairy, Nutrition, and Forestry.
“The dairy industry has a great opportunity to move forward to a more market orientated approach that will be good for dairy farmers and processors in the long run if we finally make changes that the Upper Midwest has advocated from more than two decades,” Bruins said.
“We need to seriously look at replacing the current price support program with a counter cyclical program patterned after the Milk Income Loss Contract (MILC) program to be a safety net and not a price guarantee,” said Bruins in a statement submitted to the subcommittee.
“The price support program, which has been touted for years as an effective safety net, no longer serves that purpose,” Bruins said. “The only thing raising the support price will do is trigger the over production of milk and the subsequent purchase of dairy products by the federal government.
He added that because of changes in the way we manufacture and market cheese, the price support program and Commodity Credit Corporation purchase program are not as valuable as it once was to the Upper Midwest dairy industry.
Bruins said the Wisconsin Farm Bureau believes the MILC program or a similar counter cyclical program is the best option to provide dairy farmers with an “effective safety net” when prices are low because it provides a true price floor.
“If we could properly structure a counter cyclical program we could eliminate our current price support program and get the federal government out of the business of purchasing surplus dairy products,” Bruins said.
With respect to the Federal Milk Marketing Order system, Bruins said changes to that antiquated system are long overdue.
“The Wisconsin Farm Bureau believes that federal milk marketing orders around the country need to be consolidated into a single national order to minimize regionalism and eliminate pooling issues,” Bruin said.
He added that the federal order hearing process needs to be able to more quickly be able to change the “make allowance” to help dairy cooperatives compete in a national market. He said the dairy industry needs to be able to vote on any change to a federal order without voting out an order, and USDA needs to speed up its entire hearing process.
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