The head of the National Milk Producers Federation (NMPF) appears resigned to the fact a compromise is the only way to get dairy policy reform in a new federal Farm Bill. In a statement released late Thursday, Jim Mulhern, NMPF president and CEO, said his organization would withhold support until it is assured details effectively meet the needs of the organization’s dairy producer members.

One thing seems almost certain: The dairy title will not contain the Dairy Market Stabilization Program (DMSP).

“During the past four years that NMPF has worked to revise federal dairy policy, we have evaluated a variety of proposals against two key criteria: 1) does it provide an effective safety net for all of the nation’s dairy farmers?; and 2) does it protect taxpayers from the possibility of excessive program costs through the use of suitable incentives for those enrolled in the program?,” Mulhern said. “The resulting Dairy Security Act measure, contained in the farm bills approved by the House and Senate Agriculture Committees in 2012 and again in 2013, is a loss-prevention margin insurance program that meets those objectives. 

“We were initially heartened that the four bi-partisan leaders of the House-Senate farm bill conference committee included the DSA language in the package that they were planning to present to the full conference,” Mulhern continued. “Despite the long-standing opposition to this plan from House Speaker John Boehner, we were confident we had the votes in the conference committee to defeat any amendment to strike the market stabilization program. Unfortunately, the Speaker’s threat that he would not allow a vote on a farm bill containing the market stabilization program has effectively served to kill our proposal within the committee.

 “We are now engaged in discussions with agriculture committee staff on an alternative approach to creating a dairy safety net that would contain inducements to help achieve a supply-demand balance and prevent catastrophic milk price collapses like we experienced in 2009,” Mulhern said.

 “At this point, it is conceivable that an alternative mechanism could be developed, relying upon adjustments to the program’s margin insurance payout structure and participant premium rates, among other options. Any such approach must still offer an effective risk management tool to farmers, while containing suitable incentives to program enrollees to achieve cost controls. As always, the devil is in the details, and we will not support any program that does not effectively address the needs of our members throughout the U.S.,” Mulhern concluded.

Without DMSP, the dairy title will likely contain some "disincentive" to send signals to dairy producers to not increase milk production. One possibility being hinted is an increase in margin insurance premiums. But Neither House Ag Committee chair Frank Lucas (R-Okla.) nor Ranking Member Collin Peterson (D-Minn.) have provided details on the bill.

Reports say negotiations have included Lucas, and Senate Ag Committee chair Debbie Stabenow (D-Mich.) and U.S. Ag Secretary Tom Vilsack.

Peterson, who worked with NMPF to construct the Dairy Security Act eventually approved in the Senate version of the Farm Bill, stressed he has not accepted any deal yet. 

Those details remain sketchy, news of a possible compromise on dairy policy prompted Sen. Richard Blumenthal (D-Conn.), a member of the Senate Ag Committee, to raise a glass of milk on the Senate floor to celebrate the breakthrough.

A final Farm Bill proposal could be pushed into February. Congress departs Washington on Friday, Jan. 17, for a week-long home “work period,” returning on Monday, Jan. 27.