Meeting this week in Washington, D.C., the Dairy Industry Advisory Committee established by Agriculture Secretary Tom Vilsack came closer to finalizing its recommendations for improving profitability for dairy producers and reducing farm-milk price volatility. The major action occurred on Thursday when the committee voted on and accepted approximately 20 recommendations for policy changes.

While most of the proposals represent good steps forward for the industry, the committee also passed by a one-vote margin a recommendation that all states be mandated to adopt California's standards for milk solids and, by a similar one-vote margin, a proposal to implement a government-mandated "growth management program." IDFA is opposed to both of these recommendations.

"The committee has worked to examine price volatility and dairy farmer profitability and has reached broad consensus with support from both processors and producers on the need for new policies and programs to help the industry," said Jerry Slominski, IDFA senior vice president. "But these two highly controversial and extremely close votes in support of policies that have negative track records divide the industry and threaten the good work that has been done to date."

The committee is expected to meet one more time, on January 12-13, to finalize the recommendations and send them to Secretary Vilsack for review.

Regarding a requirement for higher milk solids, IDFA believes implementing California's standards throughout the country would raise retail milk prices, increase the costs of federal nutrition programs and reduce dairy exports. It also could hurt consumption and would increase the calories per serving of milk.

IDFA also holds that government-mandated limits on milk production are short-sighted and counter-productive. A recent study by Informa Economics, sponsored by IDFA, examined what happened in Canada, the European Union and other countries when government-mandated supply controls were implemented and enforced. The study concluded that supply-control programs limit exports, create an economic incentive for imports and increase consumer milk and milk-product prices.

"On the positive side, we are encouraged by the committee's proposals to endorse a new margin insurance program and to further review the Federal Milk Marketing Order system and look for ways to simplify it," Slominski said.

More details will be available soon on the Dairy Industry Advisory Committee section of the U.S. Department of Agriculture website.

Members with questions may contact Slominski at jslominski@idfa.org.

Source: IDFA