Signs are there may be a compromise on dairy policy included in the federal Farm Bill, although specific details remain sketchy as talks continued into Wednesday evening. 

Despite that potential dairy compromise, it's looking more likely final Farm Bill passage will be pushed into February. Congress leaves for a week-long “home work” period on Friday, returning Jan. 27.

The Hill’s on the Money Blog reported that House Ag  Committee chair Rep. Frank Lucas (R-Okla.) said work was moving forward on a compromise dairy plan that does not contain the Dairy Management Stabilization Program (DMSP), but instead is seeking another disincentive to address overproduction of milk.

Politico.com reported House Ag Committee Ranking Member Rep. Collin Peterson (D-Minn.) had expressed some doubt — from what he knew of the proposal — if it would work effectively. 

Some reports indicate the alternative policy is based on a plan drafted last fall by a pair of Ohio State University dairy economists, Cameron Thraen and John Newton. Their plan includes a dairy producer margin protection program coupled with a revised Milk Income Loss Contract (MILC) program, but does not include DMSP.

Groups send letter opposing DMSP

Meanwhile, dairy producer groups opposed to DMSP made a late push in a letter to Farm Bill conferees this week. Organizations signing the letter included the Wisconsin Dairy Business Association (DBA), California Dairies Inc. (CDI), National All Jersey, the Dairy Business Milk Marketing Cooperative (DBMMC), the Dairy Policy Action Coalition (DPAC), the Northeast Dairy Producers Association (NEDPA), and the Kentucky Dairy Development Council. The letter urged conferees to support dairy policy contained in the House version of the Farm Bill. The letter countered what it said was a statement by Peterson that all dairy producers favored DMSP.

"It simply is not factual when Representative Peterson states that all dairy farmers want the government to control the milk they produce on their farms through DMSP. Many dairy farmers from all over the country are aligned and opposed to supply management," said Laurie Fischer, DBA executive director.

"As dairy producers and businesses working in the dairy industry, we ask that you support the dairy title as amended in the House version of the Farm Bill, which excludes the Dairy Market Stabilization Program, also known as supply management," the letter reads.

"We believe this convoluted system is the wrong approach," the dairy groups continued. "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 hurt our exports." 

"We ask you to please work with your fellow conferees to ensure that the final Farm Bill does not include the DMSP, but rather provides a safety net for dairy farmers without supply management. A strong majority of the House of Representatives believes this is the right approach for dairy policy and the dairy farmers in the United States hope you will join their leadership in seeing this through to the finish line," the letter concluded.