A coalition of 28 dairy processors has called on Senate conferees for the 2013 Farm Bill to accept the House-passed dairy title that does not include the Dairy Market Stabilization Program.

Dairy industry at odds over Dairy Market Stabilization ProgramTwin Cities Business explains that this stabilization program “is tied to the so-called Dairy Producer Margin Protection Program, which is essentially an insurance program designed to aid producers if their margins—the difference between milk prices and feed costs—reach a certain threshold.”

According to the coalition, the controversial new program would periodically limit milk supplies. It was included in the Farm Bill passed by the Senate in June but rejected by the House in July.

"The Senate bill would require dairy farmers enrolled in a margin insurance program to periodically limit the amount of milk their farms can sell," the letter reads. "And it would empower USDA to regulate our businesses, by requiring us to withhold a portion of our commercial market payments to dairy farmers who supply milk to our manufacturing plants and submit these funds to USDA instead.”

"We believe this convoluted system is the wrong approach," the manufacturers said. "Dairy farmers who take advantage of the margin insurance should not be required to participate in a program that would have the government directly interfere in the milk supply. Limiting the milk supply will discourage further investment and growth in our industry and will impose additional and unnecessary regulations on our businesses."

The companies are members of the International Dairy Foods Association (IDFA), which has led the opposition to government-mandated production limits.

"The House-passed bill allows dairy companies, particularly dairy exporters, to continue to grow and create jobs," said Jerry Slominski, IDFA senior vice president of legislative and economic affairs. "It provides an effective new safety net to help dairy farmers through difficult times without reducing the effectiveness of our government's nutritional safety net."

Click here to read the full letter or here to read the release.