The Hagstrom Report

Agriculture News As It Happens

Tipton, Kozak agree and disagree on same stage


MIAMI – The leaders of the International Dairy Foods Association and National Milk Producers Federation put on a display of cooperation on many issues today at IDFA’s Dairy Forum here, but agreed to continue to disagree on National Milk’s proposal for supply management as part of a reform of the federal dairy program.

After IDFA President and CEO Connie Tipton noted that the two groups work together on many nutrition and regulatory issues, National Milk President and CEO Jerry Kozak said, “We’re together a lot more than people realize.”

Tipton and Kozak, who once worked for the IDFA, agreed that they should move forward with reform whether the price of milk is high or low when the next farm bill is written.

Tipton said she agrees with proposals in National Milk’s “Foundation for the Future” plan to end dairy price supports and the milk income loss contract program, and to start a margin insurance program and simplify federal milk marketing orders. But she continues to oppose the supply management proposal that National Milk calls the dairy market stabilization program.

Tipton proposed the two groups go to Congress with the three elements they agree on, but Kozak dismissed the idea. “That’s not going to happen,” he said. “We are going to continue to put forward Foundation for the Future as a package.”

The depth of the disagreement was apparent in their statements. Under the market stabilization program, if the margin between the government’s milk price and the cost of feed goes below a certain level, farmers would be paid by milk buyers only for a “base” level of production. If they sell more, the milk buyer would send the money to USDA, where a panel of government officials and producers would attempt to spend it in a way that would increase demand.

“Farmers don’t know what they are getting into,” Tipton said, but Kozak replied, “Oh, no, they do.” The dairy market stabilization program, he said, is “a way for us to look collectively at times when there are imbalances.”

Kozak emphasized that farmers lost billions in equity in the 2009 dairy crisis and that such an event cannot be allowed to happen again. Tipton said that she does not believe “you can design a program to insulate us from a global crash.”

Tipton also suggested that the dairy industry go after some of the money that is currently used to subsidize the corn industry, and use that for a bigger insurance program. Kozak said it is politically difficult to go after crop growers’ money.

Tipton also said IDFA opposes the ethanol program, but Kozak said National Milk does not take that position because it has farmer members who grow corn and sell it, as well as using it for feed.

Tipton and Kozak also disagreed over National Milk’s program to stimulate foreign sales with payments, a program that Tipton calls a subsidy but Kozak says is not, because farmers are using their own money rather than government money. IDFA member companies have complained that National Milk’s program has caused customers to shift to U.S. co-ops as their suppliers. “I don’t think subsidies should take away people’s customers,” Tipton said.

Kozak said he had met with House Agriculture Committee Chairman Frank Lucas, R-Okla., and ranking member Collin Peterson, D-Minn., and that they have shown “a willingness to move Foundation for the Future.”

“Congress doesn’t want us to go through another 2009,” he said. “I hope we can begin the debate in another month.”