On April 19, a coalition of 29 dairy organizations sent a letter to the Senate Agriculture Committee, urging inclusion of the Dairy Security Act in the next Farm Bill.
Their letter said federal policy should focus on the margins between milk prices and feed costs rather than just focusing on milk prices (as is the case with the current package of price supports and the Milk Income Loss Contract program).
It wasn’t until I saw the letter that I realized how sizeable the support is behind the Dairy Security Act. The organizations named in the letter include Dairy Farmers of America, Dairylea, Land O’Lakes, Agri-Mark and numerous other cooperatives and state dairy associations. It is not unanimous, but a solid majority nonetheless.
Now that Farm Bill discussions are under way, it is time to stand up and be counted.
Our magazine has stated its support for the Dairy Security Act for some time now. We have also stressed the need for unity if the dairy industry wants to get fundamental reform from Congress.
The current system is broken.
When the price of milk falls, there is still a substantial cost to produce that milk – especially as it relates to feed. So, when the margin gets squeezed, farmers have no other choice but to increase production to try to stay ahead. Yet, adding more milk to the market simply aggravates the supply-and- demand picture, causing milk prices to drop even further.
That is why it is important to focus on the dynamics between milk price and feed cost. The Dairy Security Act would set up a voluntary insurance program to help deal with negative price swings.
The Dairy Security Act represents the best chance of meaningful reform. While there are opponents, they simply have not galvanized enough support to come up with a viable alternative.
After months of discussion, it’s time to get behind a proposal and encourage its passage this year, because as the years go by and Congress finds itself increasingly cash-strapped, options will decline.