Stand up for Dairy Security Act

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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.

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Batavia, NY  |  May, 07, 2012 at 06:54 PM

The MILC was one of the few successful government programs in that it favored the smaller dairy farms. The downturn of 2009 was the first time that large dairy farms suffered more than small farms and the so called Dairy Security Act is meant to make sure that does not happen again. The governor of Wisconsin and Senator Schumer of New York want to expand milk production and somehow this law will reduce production? NMPF must think that all dairy farmers are fools to actually support a program like this!

matt constable    
nepa  |  May, 07, 2012 at 08:20 PM

Dairylea just added a 10-20cwt balancing fee to my milk check, I really don't think they're looking out for thier members best interest. Must be nice to be able to just send out a letter anytime you need more money and then take it with out any reprocussions. I'll be canceling my contract as soon as I can.

Minnesota  |  May, 07, 2012 at 09:08 PM

Be careful what you wish for. I smell quota!

David Foster    
Ft. Scott, KS  |  May, 07, 2012 at 09:42 PM

MILC was successful - 30 yrs ago! But recently, If milk prices warrant a MILC payment with current input prices far outweighing milk price to allow for a margin of production - the we are still LOSING MONEY! I don't buy into any of the large farm/small farm BS. We need ALL dairymen, irregardless of size. NMPF's plan was created by dairy farmers for dairy farmers and for the dairy industry. Reducing production only happens when there is a market imbalance between supply and demand. Luckily, for the non-believers and those that can't comprehend what it takes for the greater good so that we ALL may succeed, this program is now VOLUNTARY! Therefore, if you don't want to take part in this risk management tool and feel that you can stay in business under the current system (which would most likely be gone anyways) then good luck and when you sell out, maybe I can buy your cows, because at least this system will protect a margin. You can keep your price floor under the cost of production.

Batavia, NY  |  May, 08, 2012 at 02:28 PM

MILC was successful in 2009 also! Maybe just not for you and your highly leveraged operation. The MILC is not designed to make up for high milk prices, nor should it be. It is a safety net to help during times of low milk prices. And the fact is, ALL of us are not going to succeed. No government program will ensure the success of everyone. As a taxpayer I am offended at the thought that you want the government to set up the economic conditions so that you can build an ever increasingly large dairy by buying out your neighbors.

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