Editor's note: The following statement was sent out Thursday afternoon by Jerry Kozak, president and CEO of the National Milk Producers Federation, in response to statements made Wednesday by the International Dairy Foods Association.
“While everyone is entitled to their own opinions about the best approach to reforming dairy policy, no one should be allowed to misrepresent the facts or make unfounded assertions. There are several misleading claims that were made in Wednesday’s statement from IDFA President and CEO Connie Tipton regarding the release of a legislative draft by Rep. Collin Peterson (D-Minn).
- The U.S.’s ability to export dairy products will be severely hindered or jeopardized.
FACT: Dairy farmers have invested millions of dollars in building and fostering an export capability, through the creation and continued funding of both the U.S. Dairy Export Council, and the Cooperatives Working Together program. We are fully aware that foreign sales of U.S.-made dairy products are crucial to the current and future health of our industry, and don’t want policies that would detrimentally affect our export capabilities.
In fact, we believe export opportunities will be enhanced with the elimination of the Dairy Product Price Support program, which is contained in this proposal. Currently, the price support program acts as a government-funded buyer of last resort for a limited list of commodities, including cheddar cheese, butter and nonfat dry milk powder. Unfortunately, this program also acts as a disincentive to exports. Once this program is eliminated, markets during periods of surplus will clear more quickly. Product manufacturers will no longer have the incentive to make dairy foods intended only for the government, and every incentive to sell those products on the world market. The price support program has hindered our ability to fully develop and capitalize on foreign markets, as was the case in 2009, when U.S. dairy exports dropped and government price support purchases surged. Foundation for the Future (FFTF) changes this for the better.
- U.S. farm-level prices could become distorted and out of alignment with world prices.
FACT: While the triggers contained in the Dairy Market Stabilization Program (DMSP) are tied to margins, not price, the FFTF program was designed to account for the possibility that periodic discrepancies could occur where the U.S. farm-level milk price is above the world price, creating an imbalance that could incentivize more imports, and/or hinder exports.