'Supply management' survives challenge in House

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A key element of dairy policy reform has survived a challenge in Congress. 

The Goodlatte-Scott amendment, sponsored by U.S. Reps. Bob Goodlatte (R-Va.) and David Scott (D-Ga.), would have removed market stabilization from the House version of the 2012 Farm Bill. 

Market stabilization, or "supply management" as opponents refer to it, is intended to discourage milk production increases in times of tight profit margins.

On Wednesday, the House Agriculture Committee voted 29-17 to reject the amendment, leaving market stabilization intact. 

The House Ag Committee appears to favor the key reforms passed by the U.S. Senate, including a margin protection program for dairy farmers in times of tight profit margins, as well as market stabilization. The reforms would be voluntary; however, if producers wanted to participate in the margin protection program -- a type of insurance coverage -- they would also have to agree to market stablization.

The National Milk Producers Federation (NMPF) praised the committee's action.

"We commend those members of the House Agriculture Committee who today defeated an amendment to the 2012 Farm Bill that would have undone years of consensus-building and compromise among dairy farmers," said Jerry Kozak, president and CEO of NMPF, and Randy Mooney, Chairman of NMPF and a dairy farmer from Rogersville, Mo.

"We urge the committee to proceed with final approval of the 2012 Farm Bill this week, and will work to help assure passage of the measure in the full House of Representatives, and ultimately, obtain a new and better safety net program for America’s dairy producers," Kozak and Mooney said.  

Meanwhile, the International Dairy Foods Association (IDFA) expressed disappointment in the House Ag Committee vote.

“We applaud Mr. Goodlatte and Mr. Scott for their leadership on this issue, and thank the many members who voted in favor of the amendment,” said Connie Tipton, president of IDFA.

“We also appreciate the broad support garnered for this amendment by a large coalition that now includes dairy producer groups, food trade and restaurant associations, consumer protection groups and taxpayer watchdog groups. Opposition to the Dairy Market Stabilization Program has been steadily growing as more people become aware of this controversial plan that will impose milk supply limits on the dairy industry and increase regulations on businesses…

"Today’s close vote, with bipartisan support, proves that our chances are excellent of winning a vote on the House floor when the Farm Bill is brought for a vote. Speaker of the House John Boehner has already indicated his intention to speak out against supply management for dairy. We look forward to helping Congress pass forward-looking legislation that will provide a safety net for dairy farmers without limiting our industry’s ability to grow, create jobs and help our nation’s economy,” Tipton said.


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Jeremy Gross    
Alberta, Canada  |  July, 11, 2012 at 08:31 PM

In times of low profit margins? In other words when sky is out pacing demand and processors are giving less and less for milk all producers want to do is keep shipping as much as they possibly can and keep getting paid for it.all the processors want is a much milk for as little as possible.who makes this fairy tale possible.U.S tax payers.

Glen Henry    
pennsylvania  |  July, 12, 2012 at 10:33 AM

Supressing over production in times of low milk price seems like only part of the solution. Supressing overproduction in times of HIGH milk prices seem like a better idea. As dairy producers we seem to like to over produce in times of high prices only to spiral downward with too much milk and falling milk prices.

PNW  |  July, 12, 2012 at 10:44 AM

I agree with Glen Henry the supply should be managed according to demand and even world demand not prices, this way we dont hurt exports and also solves the problem of producers constantly wanting to ship more milk in high price and low price times. Plus its all voluntary I would think the only real segment holding this bill up is the misinformed and the processors or co-ops which are supposed to be on our side but sure dont seem like it when they vote against us producers!

Tana Weisgarber    
Massillon, Ohio  |  July, 12, 2012 at 11:35 AM

Supply management will never work as long as the US allows imports! Are we going to limit my production and let New Zealand and Australia produce all the milk they want? They will flood our market if our price stays above $20.00/cwt., thanks to free trade agreements. There does need to be mandatory reporting of utilization for all classes of milk and mandatory reporting of the prices paid for all milk, powder, whey, ect. Federal order reform would go a long way to getting us a fair milk price. When the difference between farm milk price and consumer price keeps growing and congress does not see a problem with this supply and demand will never work. If consumer price would go down when supply goes up then cousumption would go up and supply would level out. It is not rocket science . Obviously the processors like high consumer prices and thier profit margin stays high without pushing extra volumes of milk, cheese, ice cream, ect. The world is starving and you want to limit production? Another flaw with the present plan is that it does allow an increase in production, annually. But producers shoould be allowed to accumulate their increases in production over time. To be able to build a new free stall barn or put in a new parlor or a bigger bulk tank, legistically you have to fill that barn right away. Not fill it over 5 or ten years. The big farms can take 5% of their herd to fill a new barn but the little farms will only increase 5 or 10 cows per year. I wish the Jerry Kozacs of the world would fall off the face of the earth. They don't have a clue what it is like on the farm or how to make things work for us. Follow the money to find their true motives.

mn  |  July, 13, 2012 at 10:32 PM

Tana you are right on. you will see more milk from larger farms and small go away faster with this program

MN  |  July, 12, 2012 at 03:15 PM

We are already a milk-deficit nation! Why on earth would we limit the amount we produce? Tana is right, we cut production and New Zealand is ready to fill the void, until China bids a bit higher for NZ product, then the US is left without. I wish more people could think long term, little thought is given to long term implications of the tangled web of the farm bill, trade policy, and environmental policy, and we are setting the next generation up to know what it is to be hungry.

WI  |  July, 12, 2012 at 07:16 PM

Why do we producers always look to the government for a solution? The government cannot manage anything, just look at the dismal oversight in the MF Global scandal. The government started the federal milk marketing orders and look what a mess they are. I would like to see no orders and no dairy plan and I think dairy producers would all be better off.

Glen Henry    
pa  |  July, 12, 2012 at 10:38 PM

My origional comment wasn't meant to support supply management, but maybe we should be looking for the solution a half cycle earlier when milk production is up 4+% over year before. When milk prices drop and dairy producers give in and sell out, how healthy is that for the local dairy economy. We loose the dairy infrastructure. Is that OK? We are just putting production in the hands of fewer and fewer every year.

David Bell    
Sault ste. Maire  |  July, 13, 2012 at 07:10 AM

Supply management works that's why the processors have always fought it so hard, it's used in many industries and remember you can't import fresh milk. Next thing we need to do is get people to drink milk again we continue to loose demand some people have been scared off of it by doctors like my neibor because of antibiotics and hormones.

MN  |  July, 13, 2012 at 07:12 AM

Do we really want our government telling us how to run our businesses? Our politicians can't put a budget together yet we think they can solve our proceived problems. Come on man!!!

MN  |  July, 13, 2012 at 07:26 AM

Thats percieved not procieved. Spelling is not a skill I've yet mastered:-)

California  |  July, 23, 2012 at 03:32 PM

Why are the major Co-ops not taking a role in supply management? It seems to me that they are in the best position to guage demand and work to make the supply (as provided by their members) match.

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