Commentary: Stand up for Dairy Security Act

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On April 19, a coalition of 29 dairy organizations sent a letter to the Senate Agriculture Committee, urging inclusion of the Dairy Security Act in the next Farm Bill.

Their letter said federal policy should focus on the margins between milk prices and feed costs rather than just focusing on milk prices (as is the case with the current package of price supports and the Milk Income Loss Contract program).

It wasn’t until I saw the letter that I realized how sizeable the support is behind the Dairy Security Act. The organizations named in the letter include Dairy Farmers of America, Dairylea, Land O’Lakes, Agri-Mark and numerous other cooperatives and state dairy associations. (See entire list below.).

Now that Farm Bill discussions are under way, it is time to stand up and be counted.

Our magazine has stated its support for the Dairy Security Act for some time now. We have also stressed the need for unity if the dairy industry wants to get fundamental reform from Congress.

The current system is broken.

When the price of milk falls, there is still a substantial cost to produce that milk – especially as it relates to feed. So, when the margin gets squeezed, farmers have no other choice but to increase production to try to stay ahead. Yet, adding more milk to the market simply aggravates the supply-and-demand picture, causing milk prices to drop even further.

That is why it is important to focus on the dynamics between milk price and feed cost. The Dairy Security Act would set up a voluntary insurance program to help deal with negative price swings.

The Dairy Security Act represents the best chance of meaningful reform. While there are opponents, they simply have not galvanized enough support to come up with a viable alternative.

Yesterday, the Senate Agriculture Committee approved a farm bill draft that contains provisions of the Dairy Security Act, including the voluntary margin insurance program. The legislation will now proceed to the full Senate for consideration.

After months of discussion, it’s time to get behind a proposal and encourage its passage this year,because as the years go by and Congress finds itself increasingly cash-strapped, options will decline.

The following groups signed the April 19 letter in support of the Dairy Security Act: Agri-Mark, Alabama Dairy Producers, Associated Milk Producers Inc., Dairy Farmers of America, Dairy Farmers Working Together, Dairy Producers of New Mexico, Dairy Producers of Utah, Dairylea Cooperative Inc., Ellsworth Cooperative Creamery, Holstein Association USA, Inc., Idaho Dairyman’s Association, Iowa State Dairy Association, Land O’Lakes, Maryland Dairy Industry Association, Michigan Milk Producers Association, Midwest Dairy Coalition, Milk Producers Council, Missouri Dairy Association, National Council of Farmer Cooperatives, National Farmers Organization, National Milk Producers Federation, Northwest Dairy Association/Darigold, Oregon Dairy Farmers Association, South Carolina Dairy Association, South Dakota Dairy Producers, St. Albans Cooperative Creamery, United Dairymen of Arizona, Upstate Niagara Cooperative, Inc., and Washington State Dairy Federation.


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Alan Kozak    
Millersburg, ohio  |  April, 27, 2012 at 08:47 AM

I find it interesting that the one item on which the DIAC was most divided is the centerpiece of the proposed new dairy policy ...and many of the items on which all agreed are absent.

Batavia, NY  |  April, 27, 2012 at 09:23 AM

I belong to one of the dairy organizations that sent this letter in support of the so called Dairy Security Act. I do NOT support the mess. The membership was never asked to vote on this. It was just decided at the highest level s if they know what is good for our farms. This is very bad for the small dairy farmer. This should be called the Super-Large Dairy Security Act. It will ensure that during any price downturn that the large dairies will be able to maintain profitability at the expense of smaller dairies. And this will also allow NMPF to maintain their position as a “voice” of the dairy farmers and allow the top brass to receive their six figure incomes. Seven figures income anyone???

Alan Kozak    
Millersburg, Ohio  |  April, 27, 2012 at 04:48 PM

Ther have been several hearings...I call them tellings because the slate of folks on the panels are usually determined before the hearings are announced.... At yeasterdays hearing Wisconsin Congressmen Ribble said that the coops come and tell him that they have the producers support for the DSA and then 10 producers come in and say that they are opposed. This is not over yet.

WI  |  April, 27, 2012 at 09:29 AM

There is not overwhelming support for this program. I bet if you took a poll of farmers themselves most would not support it. The large dairy coops support this program but most private processors do not. Why does evryone look to the government for some magical program. The government does not have a good record of managing anything and some farmers think it will be different this time. Yes the system is broken but look who created it and tweaked it over the years, fixing one problem and often times creating two more only to start the cycle over. I beleive we would be better off if the government would just stay out of the dairy sector alltogether. I think there will be many issues that will come up with this so called security act that in the end will hurt us all. We need look no farther than the healthcare fiasco that is still unfolding before us now. Familiar words support this and after it is passed we will tell you all the rules, but I am afraid after it is passed it will be to late and we will be stuck with another government monstrosity.

South Carolina  |  April, 27, 2012 at 09:44 AM

So let me get this straight. When the price of milk falls, relative to feed cost, participants get an insurance payment, probably equal to what the premiums are throughout the rest of the year and then the participants get to dump milk and lose more money, to correct the supply for the non participants?

troy Pa  |  April, 27, 2012 at 01:55 PM

If this is what dairy gets then dairy farming as we know it is done

il  |  May, 23, 2012 at 05:02 AM

This will do for dairy what crop jns. has done for grain farming. With no risk of loss they will be able to dial in a profit level that a small farmer who grows his own feed could not accept. If this happens the small dairyman is dead

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