On Sept. 8, the House Agriculture Committee’s Subcommittee on Livestock, Dairy and Poultry held an audit hearing to examine U.S. Department of Agriculture (USDA) dairy programs. This is the 10th hearing in the series on farm policy that is designed to provide oversight of current spending to ensure programs are delivered effectively. Current dairy programs include the Dairy Product Price Support Program (DPPSP), Milk Income Loss Contract (MILC) Program, Dairy Export Incentive Program (DEIP), Livestock Gross Margin Insurance for Dairy (LGM-Dairy), and Federal Milk Marketing Orders (FMMOs).
Members of the subcommittee heard testimony about how these programs are working, current conditions and productivity in the dairy industry, and possible public policy challenges moving forward.
Here are excerpts of statements made and testimony presented at the hearing:
“The events of 2009 exposed what many have long-held to be an inadequacy of some of our current dairy programs. While some observers may argue that additional funding may improve the overall effectiveness of our dairy safety net, our current budgetary outlook makes this option a non-starter.
"Innovative and effective ideas are needed in order to ensure that our programs support our producers, facilitate product and market development and continue to ensure the availability of safe, abundant and affordable products for our consumers.
Today’s hearing provided our subcommittee with an important perspective about the strengths and weaknesses of our existing programs.”
Chairman Thomas Rooney
“The dairy industry has always faced a rocky road, but the past few years have been particularly hard for California producers.
It is extremely important that future dairy policy builds a strong base so dairies can continue to produce milk and consumers can continue to enjoy domestically produced products here at home.”
Ranking Member Dennis Cardoza
“Now, more than ever, we are a global industry, and factors in the world market have a great impact on domestic prices. Domestic dairy programs are outdated and inflexible, stifling much-needed innovation.
They do not and cannot offer producers the tools necessary to manage global market changes or the tight margins that result from either low milk prices, high feed prices or a combination of both.
“It is evident current programs are flawed. They are insufficient in times of extreme volatility, which seems to be the norm rather than the exception, and do not provide an adequate safety net when margins are tight.
“We urge Congress to review and consider the policy proposal authored by Reps. Collin Peterson (D-Minnesota) and Mike Simpson (R-Idaho)…The proposal is sound, affordable and will be instrumental in strengthening the domestic dairy industry.”
Senior Vice President
Dairy Farmers of America (DFA)
“The economic vitality and quality of life in rural America, as well as the U.S. economy at large, depend on a competitive, efficient, and productive agricultural system. To increase prosperity and sustainability in our nation’s agricultural system and rural communities, AMS conducts oversight activities to protect producers from unfair business practices.
"To assist producers in management and marketing, AMS develops and oversees national standards for the production and handling of agricultural products.
AMS also supports producers by providing market information and marketing tools that serve as the eyes and ears of American agriculture to cover numerous commodities on a daily basis and provides information that impacts billions of dollars in agricultural trading each year.
“The 2008 Farm Bill directed USDA to establish an electronic reporting system for price reporting of these dairy commodities. As no funding was provided, AMS did not implement this provision.
However, in September 2010, Congress passed the Mandatory Price Reporting Act of 2010, mandating the establishment of this electronic reporting system (again without funding), while directing AMS to publish the information obtained for the preceding week not later than 3 p.m. Eastern Time on Wednesday of each week, rather than on Friday.”
[USDA issued a proposed rule to implement this on June 10, 2011. The comment period closed on Aug. 9. AMS is currently reviewing the comments received.]
Deputy Administrator for Dairy Programs
Agricultural Marketing Service, USDA