Tipton calls for more changes to dairy policy
January 26, 2015 |04:20 PM
BOCA RATON, Fla. — Less than a year after the 2014 farm bill became law, International Dairy Foods Association President and CEO Connie Tipton today called for more changes to the dairy program.
After Brian Kennell, the president and CEO of Tetra Pak USA and Canada, noted in an introduction that fluid milk consumption in the United States is at a 30-year low, Tipton presented a “2020 Vision” of the industry based on exports and innovative products.
Connie Tipton
“Milk pricing regulations, product standards of identity or restrictive labeling requirements … all add up to a straightjacket on innovation and marketing which we can ill afford in today’s dynamic marketplace. Regulation of commerce, services and transportation increases costs and heaps on inefficiencies,” she said.
“We got some things right … very right … in the farm bill enacted last year that can help guide us in the future,” Tipton said. “No longer do we have the government standing ready to purchase dairy products through a dairy price support program … the tail wagging the dog that drove industry decisions around government actions rather than market opportunities.”
Noting that the Agriculture Department announced earlier this month that more than half the dairy farms in the country enrolled in the new Margin Protection Program, Tipton said, “Such policy changes are a good start in positioning our industry to focus more on markets. But additional steps need to be taken … and we need to take them in unison.”
Tipton acknowledged that global demand has increased volatility in dairy markets, but she added, “We must recognize that lack of action to reform our domestic pricing system has had chilling effects on some sectors of the domestic industry as input costs soar while consumption declines.”
The current system, Tipton said, “alerts market dynamics with exports driving growth in demand for farm milk while our domestic pricing system uses these higher values for pricing products largely marketed here in the U.S., like fluid milk and ice cream. While U.S. milk production has grown by 36 billion pounds since 2003, nearly 70 percent of that additional farm milk has headed overseas.”
“Now is the time to allow milk to flow to its highest value use dictated by market forces … not regulations,” Tipton said.
The United States and Canada, she maintained, “are the last of a dying breed to use complex milk pricing regulations. Even the regulation-loving European Union has abandoned quotas and is seeing new approaches to dairy farming thrive in many areas.”
IDFA’s board has adopted a policy to promote market-based pricing rather than regulated pricing, she said, but acknowledged “it will take much more for the industry to embrace and work toward that goal.”
IDFA also held a session on milk pricing at which dairy farm leaders joined processors. Some dairy executives said it has proven impossible to explain the U.S. dairy regulatory and pricing system, especially when the explanation has to go through a Chinese translator.
But Jay Bryant, the CEO of Maryland and Virginia Milk Producers Cooperative Association, said that farmers won’t join in the campaign unless the processors indicate they are going to absorb some of the risk in a free market system.
Asked after the sessions if she expects Congress to act on her proposed changes before the next farm bill in 2018, Tipton said she would like to some changes before the next farm bill, but that the issues have to be addressed in both industry and politics.
“We are working on the industry bucket right now,” Tipton said.
After Brian Kennell, the president and CEO of Tetra Pak USA and Canada, noted in an introduction that fluid milk consumption in the United States is at a 30-year low, Tipton presented a “2020 Vision” of the industry based on exports and innovative products.
“Milk pricing regulations, product standards of identity or restrictive labeling requirements … all add up to a straightjacket on innovation and marketing which we can ill afford in today’s dynamic marketplace. Regulation of commerce, services and transportation increases costs and heaps on inefficiencies,” she said.
“We got some things right … very right … in the farm bill enacted last year that can help guide us in the future,” Tipton said. “No longer do we have the government standing ready to purchase dairy products through a dairy price support program … the tail wagging the dog that drove industry decisions around government actions rather than market opportunities.”
Noting that the Agriculture Department announced earlier this month that more than half the dairy farms in the country enrolled in the new Margin Protection Program, Tipton said, “Such policy changes are a good start in positioning our industry to focus more on markets. But additional steps need to be taken … and we need to take them in unison.”
Tipton acknowledged that global demand has increased volatility in dairy markets, but she added, “We must recognize that lack of action to reform our domestic pricing system has had chilling effects on some sectors of the domestic industry as input costs soar while consumption declines.”
The current system, Tipton said, “alerts market dynamics with exports driving growth in demand for farm milk while our domestic pricing system uses these higher values for pricing products largely marketed here in the U.S., like fluid milk and ice cream. While U.S. milk production has grown by 36 billion pounds since 2003, nearly 70 percent of that additional farm milk has headed overseas.”
“Now is the time to allow milk to flow to its highest value use dictated by market forces … not regulations,” Tipton said.
The United States and Canada, she maintained, “are the last of a dying breed to use complex milk pricing regulations. Even the regulation-loving European Union has abandoned quotas and is seeing new approaches to dairy farming thrive in many areas.”
IDFA’s board has adopted a policy to promote market-based pricing rather than regulated pricing, she said, but acknowledged “it will take much more for the industry to embrace and work toward that goal.”
IDFA also held a session on milk pricing at which dairy farm leaders joined processors. Some dairy executives said it has proven impossible to explain the U.S. dairy regulatory and pricing system, especially when the explanation has to go through a Chinese translator.
But Jay Bryant, the CEO of Maryland and Virginia Milk Producers Cooperative Association, said that farmers won’t join in the campaign unless the processors indicate they are going to absorb some of the risk in a free market system.
Asked after the sessions if she expects Congress to act on her proposed changes before the next farm bill in 2018, Tipton said she would like to some changes before the next farm bill, but that the issues have to be addressed in both industry and politics.
“We are working on the industry bucket right now,” Tipton said.
