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House Ag Subcommittee talks dairy policy

While the Senate Ag Committee was passing the farm bill, the  House Agriculture Livestock, Dairy and Poultry Subcommittee was taking testimony on dairy policy on Thursday. The committee heard from Joe Wright who has a 1,200-cow grazing operation in Florida and president of Southeast Milk Cooperative. He called for elimination of the Dairy Product Price Support Program, called the MILC program wholly inadequate and opposes the Dairy Export Incentive Program. He supports the margin insurance plan but opposes any supply management provisions and since participation in margin insurance requires supply management, he could not fully endorse the Dairy Security Act although he sees it as a “significant improvement over the present dairy safety net programs.” Read Wright’s full testimony here:

Tom Barcellos milks 800 cows in Tulare County, California and is president of Western United Dairymen. He told the committee he supports the Dairy Security Act but would like to see a change: As it stands now, if producers choose to participate in the margin insurance program it uses a national feed cost calculation, Barcellos says their feed costs are much higher in California. Western United Dairymen would like to see another option for farmers where they could use the average feed cost of the ten states with the highest milk production volume. Barcellos also noted that the current voluntary production cut-backs imposed on California dairy producers because of processing capacity must not be held against producers when establishing a production history.  Read Brucellos’ full testimony here:

Jon Davis, president and CEO of Davisco Foods International and representing the International Dairy Foods Association testified that changes in government policy around the world along with increasing global demand have led to the U.S. now exporting 13 percent of our milk production. Davis said that growth has prompted companies like his to invest hundreds-of-millions-of-dollars in the industry. He called for the Federal Order system to be phased-out, elimination of the Dairy Product Price Supports and Dairy Export Incentive Program and creation of farm policies that provide risk management tools or insurance to help producers through times of low net income. He stressed any program which limits production would negatively impact the industry’s ability to compete for international business and “make us an unreliable supplier.” He also noted that while participation in the program would be voluntary for producers, it would not be voluntary for processors who are at the mercy of the producer’s decision.  Read Davis’ full testimony here:

Dr. Scott Brown with the University of Missouri Food and Agricultural Policy Research Institute presented the results of an analysis of the Dairy Security Act utilizing 22 representative dairy farms in 10 states maintained by the Agricultural and Food Policy Center at Texas A & M. Each farm was analyzed using 11 different scenarios ranging from current policy to non-participation to full participation in DSA at various buy-up levels. The study found 19 of the 22 dairies had a net cash income advantage from participating in DSA. Three of the dairies, a grazing operation in Missouri and two Florida producers were better off not participating in DSA.  Read Brown’s full testimony here:

Also testifying was Jerry Kozak, president and CEO of the National Milk Producers Federation who stated the financial disaster that America’s dairy producers experienced in 2009 showed just how inadequate current dairy policy is. That is why NMPF set out to determine how to provide the best safety net possible for diary producers. He went on to explain the creation of the task force, the hearings across the country the creation of the Foundation for the Future plan and its evolution into the Dairy Security Act as it is today. The result says Kozak is a plan which provides a safety net for producers, reduces government involvement and does not restrict milk production, does not raise consumer prices and does not negatively impact exports.  Read Kozak’s full testimony here: