Note: The following are opinion commentaries. No: No way can I support the Dairy Security Act of 2011. It is short-sided, basically, for the processor – pay the lowest price, not pay components and give processors an automatic energy adjuster. Where is ours? Mr. Kozak has repeatedly said that it is unrealistic and politically unpopular to expect to get the cost of production for your milk, and that’s how FFTF is put forward. That does not work in the real world. I prefer to support S-1640. It is respectful of the dairy producer. It allows cost of production to be covered plus the ability to cover the dirty five – depreciation, interest, repairs, taxes and insurance – and, just maybe, a profit!
It does not contain any insurance or risk management, so we do not have to share our poverty with them. S-1640 also has an inventory management tool to be used at no cost to the government or its people.
There are many people who want to produce for the export market. For them, there should be a Class V like in Canada, which requires that producers group to bear all of the cost and receive whatever the export market will pay and not have the rest of us forced to share the cost or the rewards.
No: The recent in-depth economic analysis by Mark Stephenson of National Milk’s “Dairy Security Act,” which was introduced by Rep. Collin Peterson (D-Minn.), brings to light several unintended consequences that will harm the future of the U.S. dairy industry.
Stephenson’s analysis shows only a modest reduction in the volatility of milk prices, but a significant decrease in dairy farmers’ revenue. This proposal also has a huge price tag for the taxpaying public, yet is being considered as saving taxpayer dollars.
Congress has a history of making changes to dairy policy that have unintended consequences, such as the dairy price support and product price formulas with make allowances.
These programs were well-intended, but they remove competition from manufactured product classes and send a signal to our international customers that we will only sell products to them when prices are high. This approach decreases dairy farmers’ revenue.
I think Senator Robert Casey’s (D-Pa.) “Dairy Advancement Act” (S. 1682) is a better option for the dairy industry. It cleans up existing policy by removing the dairy product price support program and product price formulas with make allowances and replaces them with a true two-class system, which puts competition back into the marketplace.
It sends a clear signal to our trading partners that we will be a reliable supplier of dairy products, while giving farmers the option to use MILC or LGM-Dairy insurance as a safety net.
Dairy farms are an important part of the local economy, and federal dairy policy needs to align with the real needs and opportunities of the dairy industry.
Clifford L. Hawbaker