The Hagstrom Report

Agriculture News As It Happens


Dairy groups take sides on market stabilization program

The International Dairy Foods Association said today that Sen. Michael Bennet, D-Colo., would introduce an amendment to strike the dairy market stabilization program that is included in the draft of the Senate farm bill and replace it with a stand-alone margin insurance proposal, while the National Milk Producers Federation praised the dairy title as written and said a study shows that the program would work.
Jerry Slominski, International Dairy Foods Association

Jerry Slominski
“We applaud Senator Bennet for his leadership and thank him for offering an amendment that makes sense for dairy policy,” said Jerry Slominski, IDFA senior vice president for legislative and economic affairs. He released a statement after a news conference with executives from the dairy processing companies which make up IDFA’s membership.

“We fully support a margin insurance proposal without it being tied to a program that limits milk supply and manipulates prices,” Slominski said. “This amendment accomplishes the true compromise we have been urging for a long time.”

At a news conference, the dairy executives said that the market stabilization program, which calls for producers to reduce their milk output when margins are very low, amounts to government supply control and would discourage exports because it would reduce the supply of milk.

“The very existence of a government supply control program for dairy, including this new stabilization plan, would be a signal to our competitors and trading partners that the United States is not a serious and reliable long-term supplier,” said David Ahlem, vice president of Hilmar Cheese Company, Inc., which has operations in Hilmar, Calif., and Dalhart, Texas.

Advocates of the draft proposal have said that the government’s cost of the margin insurance program would be too high without the stabilization program, and IDFA officials said an estimate of the cost of the margin insurance without stabilization is not yet available.

Jerry Kozak, National Milk Producers Federation

Jerry Kozak
The National Milk Producers Federation released a letter with the American Farm Bureau Federation and the National Council of Farmer Cooperatives to Senate Agriculture Committee Chairman Debbie Stabenow, D-Mich., and ranking member Pat Roberts, R-Kan., urging support for the committee print.

“Although past attempts to revise dairy programs have frequently broken down along regional or farm size differences, this legislation is supported by dairy producers of all sizes and in all regions of the country,” the letter said.

“It is imperative to seize the moment and move this much-needed legislation forward. Between the years of 2007 and 2009, America’s dairy producers collectively lost $20 billion in hard-earned equity and were ill-served by the dairy programs that were, and still are, in effect.”

National Milk CEO Jerry Kozak said that the study by the Food and Agriculture Policy Research Institute at the University of Missouri “should calm any concerns on Capitol Hill that the U.S. dairy industry will be in any way diminished or hobbled by the changes we want to make.”