After months of meetings, USDA’s Dairy Industry Advisory Committee (DIAC) released a draft of its final report today, backing off on recommendations to support California solids standards for fluid milk nationwide. The committee will vote on the final report in coming weeks.
The draft report recognizes the complexity of both issues, implying both policies could create winners and losers. In the case of California solids standards, it recognizes producers in the West could benefit while producers in the Midwest could be hurt. It also recognizes that fluid sales could actually decrease slightly because fluid milk prices would likely rise, perhaps 17¢/gal.
The draft report, while encouraging the Secretary of Agriculture and the industry to continue to study growth management programs, also acknowledges potential problems: “While the declines in price volatility are positive outcomes, troubling aspects of these results are net export declines in categories under this program. Export markets have significantly helped milk price recovery in 2010, as the U.S. is now exporting nearly 12 percent of all production on a solids basis.” It also listed 14 other potential problems.
The DIAC was chartered on January 13, 2010, and charged with reviewing milk price volatility and dairy farmer profitability, and then making recommendations. It has 17 members.
