Boehner’s ‘Soviet-style dairy program’ comment draws response

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Lake Placid, NY  |  July, 17, 2012 at 03:14 PM

Finally an elected official (Boehner) that really gets it and isn't afraid to say something.
"Ending the role of government as a buyer of surplus dairy products and ending direct payments to farmers do make the system more market-oriented and save the taxpayers money, Galen told an AgriTalk radio audience on Monday.
Well Mr. Galen this isn't more a more market oriented policy, this is simply a little less government intervention. What you are replacing is not market oriented. Let's start with what you call market stabilization that you want in the Farm Bill. When this portion of the law has to kick in is when we need more market oriented policies, not one that restricts supply. If the market price is low for producers we don't need as much supply. The problem is that your solution in the Farm Bill is anti-market orientation. Less supply should come from less producers, not punishing by fining those dairy farmers that are more efficient.
And by the way, if you are successful in getting these new dairy policies enacted, what will you do with the surplus products under "market stabilization", you'll give the product away. This is not more market oriented, it will only displace other product maufacturers and distributors are trying to sell, unfairly competing with them.
No, I don't think guaranteeing someone in the pipeline to pay for their costs of doing business(this would be your margin insurance that tax payers will food some of the bill for), holding back supply artifically(sending signals to buyers overseas we are not a consistent market oriented supplier) and then giving dairy products away that should be sold is more market oriented.
Boehner is right, this is a bad system only being made worse. It should be dumped from the Farm Bill.

OH  |  July, 18, 2012 at 08:34 AM

John Boehner is just doing what his corporate masters want him to do. He is a puppet to who gives him and his party the most money. It doesn't matter if that is the best for the country.

If IDFA is against it, then it must be good for the dairyman.

Buffalol,N.Y.  |  July, 18, 2012 at 09:19 AM

Mr. Galen is purposing what is good for the co-ops and the processor, cheep milk with money to be made for co-op's and processor's management.

Abilene, Tx  |  July, 18, 2012 at 09:34 AM

Get rid of gov subsities! I have seen farmers produce crops NOT needed for years. Let the market determine what you produce. We farmers are better than a dependant class of people to the government. Remember when people refused charity? Well now we do! Something big in character lost somewhere!


Johnny

Indiana  |  July, 18, 2012 at 09:53 AM

Quick question: when Canada, the EU and Australia are all getting ready to end there quota/supply management schemes, why then do the people at NMPF think that imposing a quota system in the US would be a good thing? Everyone that's tried it for years now realizes its the wrong thing to do. Let capitalism work. Quit trying to punish efficient well managed dairy farmers.

TN  |  July, 18, 2012 at 09:59 AM

AS I understand at $6 over feed cost you are told to cut production , government help comes at $4 over feed cost. If you have a multiple million dollar business why put yourself in that position. The unknowing that do lock themselves in this agreement are going to be the looser, there is no relief at $4 and there is less pounds to multiply a price by. The operation that does not cut production and chooses to do risk management some other way will be the one ahead, because if the government forced cut in production increases price those with the pounds get the dollars. What happens when government forces a cut in production and then you have a year where environmental condition creates a cut back in production and harm is done to the demand side? How is this plan going to align with WTO rules? Are we going to loose export markets? Why do we want central control of our industry? If I make a mistake, I change in a hurry. If NMPF and their over paid leadership get it wrong the industry will be years crawling out from under the mess.

IL  |  July, 18, 2012 at 10:04 AM

Thank you, Mr. Boehner, for speaking the truth. Dairy farming is a business, and nobody has a "right" to continue farming, just because they were born into it. If your business model cannot survive without subsidy, you should be out of business. Your failure and subsequent liquidation may provide the opportunity for a young, beginning farmer to start out. They hypocrisy of older farmers complaining that they "can't make it" while refusing to adapt to new market realities frustrates me to no end. The same folks complaining about welfare, food stamps, etc. are the first ones with their hands out for CRP, MILC, etc.

Butler,Pa.  |  July, 18, 2012 at 02:49 PM

There is a major problem with the Dairy Secutity Act that is not being discussed. The pricing of milk ( price discovery )will change to what is called a competitive pay system. I believe that when supply begins to exceed demand and the buyers bids begin to drop and the price will free fall because the cost of buying the milk can be transfered to the goverment on 80% of the milk that is in the program. This will reduce the processors cost by 100's of millions of dollars per month. The counter cyclical nature of the margin insurance payments will help to keep milk flowing and ignoring the market signals. The supply management part of this program does not really require you to reduce supply, but you just do not get paid for the 2% to 8% of your recent production. The margin insurance more than makes up for this so many dairyman will just continue to ship the extra milk in the hopes that someone else reduces production and the program triggers out. If this plays out as I suspect this program will be a very costly program.

MN  |  July, 18, 2012 at 04:19 PM

The US is a dairy deficit-producing country. Why on earth would we want to restrict production? Enforce FDA rules
in cheese-making and there goes all of that 'surplus' milk. Stop allowing imported ingredients that do not meet food
grade standards to be used in food processing and all of a sudden there is not enough supply to meet demand, nor
will the capacity to produce more exist under a quota system.

Hull, IA  |  July, 18, 2012 at 06:47 PM

Call me crazy but I would much rather put my future in a free market model, than having the government intervene. The government has not proven itself effective or efficient why do milk producers think they will come up with a magic potion when it comes to dairy. I believe a free market system where supply and demand determines milk production is simply the most reliable. When we continue to keep everyone in business we simply make all dairies weaker, because of excess product on the market. Losing equity is miserable and no fun, however it does make us look at our operations closely to determine where we can save and be more efficient.

MN  |  July, 18, 2012 at 07:50 PM

If this is such a good program lets, supply management, let's have it for all other commodities.

Surplus production happens from time to time in all commodities. Should we then have supply controls for corn

Beans, hogs etc?

Millersburg, Ohio  |  July, 19, 2012 at 06:33 AM

I have a question for Mr. Galen. If the DSA were law since say Jan 1, 2012 would it have
triggered mandatory production reductions for producers that enrolled in that option?
Based on futures prices will July margins be low enough to trigger cutbacks? If so what %
and in which month or months will producers not be paid for what % of their production over their base?

Idaho  |  July, 20, 2012 at 11:24 PM

David Brand says it all.. nothing else needs to be said