The International Dairy Foods Association has commissioned a study of government-mandated dairy supply control programs, and, not surprisingly, the results aren’t positive.
“Instead of relying on theoretical computer models, this study looks closely at what has happened to dairy industries in countries where a form of milk supply control is used and clearly maps out consequences, both intended and unintended, for their producers, processors and consumers,” said Connie Tipton, president and CEO of the International Dairy Foods Association (IDFA), which commissioned the study.
“Dairy farmers still face price volatility in countries that have implemented supply control, but end up managing their farms according to government dictates on how much milk they can produce,” she says.
The study concludes that supply control programs limit exports, create an economic incentive for imports, increase consumer milk and milk-product prices, and add layers of bureaucracy to government oversight systems.
The report, released today, was completed by Informa Economics, Inc., a world leader in broad-based domestic and international agricultural and commodity/product market research, analysis, evaluation and consulting. It shows that:
• Milk supply-control programs in other countries have not reduced price volatility or slowed the number of dairy farms going out of business.
• Milk supply control programs have constrained dairy industry and job growth in the European Union and Canada, and limited export growth in these countries.
•Consumption growth for fluid milk, cheese and butter has been slower or declining in countries with milk supply control programs.
