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House Ag Subcommittee hears differing dairy views

The one thing everyone in dairy agrees on is there is a severe crisis for dairy producers today. How to fix the situation is not as easily arrived at. The House Agriculture Subcommittee on Livestock, Dairy and Poultry heard from dairy producers on Tuesday and the suggested solutions varied.

Craig Lang is a dairy farmer at Brooklyn, Iowa; he farms with his father, brother and two sons and is president of the Iowa Farm Bureau. He told the committee these are probably some of the most challenging times ever in the dairy industry. He noted some of the things that have already been done in an effort to help, increased government purchases of dairy products for federal food programs, full implementation of the Dairy Export Incentive Program and the Cooperatives Working Together (CWT) herd retirement program, “But still that’s not enough.” For one thing, Lang says American Farm Bureau believes we need to reduce cow numbers by at least three percent to have an impact. However, he does believe these tools will work but need to be given time to work.

California dairy producer Joaquin Contente is president of the California Farmers Union. He told the subcommittee one of the easiest things that can be done is for the U.S. Ag Secretary to raise the support price which he has the authority to do. The National Milk Producers Federation has asked the Ag Secretary to temporarily increase the support price for cheese by 6 cents per pound and increase the nonfat dry milk powder price by 4 cents. Contente says, while he is grateful for National Milk making that request, it is not nearly enough. “We have producers that are five, six, seven dollars below where they need to be,” says Contente, “We need to have something more meaningful than the 50 or 60-cent increase that would translate into.” He adds the increase wouldn’t have to come all at once, but something has to be done for producers who have no options left, no way to feed their cows.

The two dairy producers differ on their assessment of the status of ag lenders. Lang says the good farmers in his area that have established a good, long-term working relationship with a good banker is in good shape. “For those farmers that made wise decisions and paid down debt, debt is very reasonable today.” He does note things are more challenging for young farmers just getting into the business, “That’s a different policy discussion altogether.”

Contente says the financial “Ship is starting to leave port” especially in California where lenders were waiting to see if producers would get into the CWT buyout to cover a little more of outstanding loans. “Now that one program is complete and the other is getting ready to go into effect, if you haven’t got on board with that program, you’re just going to have to get out the conventional way.” California cow numbers are down about 5 percent so far. He notes that Commodity Credit purchases of nonfat dry milk have been declining in recent weeks.

Contente also believes the long-term answer to dairy is supply management, Lang disagrees; he says that would stop growth in the dairy industry at a time when increasingly more people are going hungry. “Where do you set the price of milk so that you don’t get oversupply and you don’t manage supply in such a way that you drive up food costs.”

Both agree that Congress is getting a lot of pressure from the industry and ag lenders to do something but the question remains, what?

Craig Lang talks with Dave Russell 7:45

Joaquin Contente talks with Bob Meyer 8:00

Dave Russell contributed to this story.