“I’ve often said that if you put 10 dairymen in a room, you’ll get 12 opinions, and they’re all firm,” said Vander Dussen. “We’ve had that luxury in the past. But the last 2 ½ years have taught us a valuable lesson – we have a woefully inadequate system that leaves our nation’s dairy farmers powerless in this highly volatile market. As dairy farmers, we need to put aside perceived differences and act as one unified industry.”
“This legislation will have things that producers like and things they don’t,” said Vandenheuvel. “In an industry with farmers in every region and of every size, that type of comprehensive package is the only chance we have of unifying our industry. It’s time to show Congress and the processors that buy our milk that dairy farmers are capable of working together to improve the lives of all dairies from coast-to-coast.”
The three pieces of Rep. Peterson’s legislation are:
- Dairy Market Stabilization Program (DMSP) – This is a stand-by program that triggers in only when the “margin” (U.S. all-milk price minus feed cost calculation) dips below $6.00 per cwt for two consecutive months. The DMSP provides a temporary incentive for all dairies to cut back milk production. Once markets recover and the “margin” is greater than $6.00 per cwt for two consecutive months, the DMSP is lifted, and is on standby again until the next time the margin calculation compresses below $6.00 per cwt.
- Dairy Producer Margin Protection Program (DPMPP) – This is a safety net program that would replace the Milk Income Loss Contract (MILC) and Dairy Product Price Support Program (DPPSP). The DPMPP would provide “margin protection” for all dairies when the margin (again, U.S. all-milk price minus feed cost calculation) dips below $4.00 per cwt. Individual dairies can elect to increase their “margin protection” above $4.00 per cwt. for a pre-determined annual premium (this is called the “supplemental margin protection”).
- Reform of Federal Milk Marketing Orders (FMMO) – In short, these reforms would remove end-product pricing and the use of make allowances for milk sold to all plants other than Class I bottling plants, and replace it with a competitive, market-based system.
More information can be found on National Milk Producers Federation’s website at www.futurefordairy.com.