Wisconsin Ag Connection - DBA: Analysis of DSA Legislation Not Being Manipulated

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DBA: Analysis of DSA Legislation Not Being Manipulated
Wisconsin Ag Connection - 11/04/2011

The leader of a Wisconsin farm organization is firing back at the National Milk Producers Federation for accusing her group of misinterpreting an analysis of the Dairy Security Act in order to back up their opposition to the proposed policy. Dairy Business Association Director Laurie Fischer issued a statement on Wednesday saying that a study of the DSA by Dr. Mark Stephenson of the University of Wisconsin and Dr. Chuck Nicholson of Cal Poly-San Luis Obispo showed that there would be a milk price reduction of $.80 to $1.63 per hundredweight for all size farms with only moderate milk price volatility improvement.

The research was conducted at the request of the DBA and unveiled to a group of Wisconsin dairy producers on October 20.

"Dr. Stephenson and Professor Nicholson created this systems dynamic economic model of U.S. dairy industry several years ago," Fischer said. "This model has been used to examine multiple dairy policy concepts in recent years. The modeling analysis concludes that small farms will leave the dairy industry at a faster pace. I had an email correspondence with Dr. Stephenson following his presentation to confirm and clarify elements of his presentation."

Fischer went on to say that her group is 'not manipulating, extrapolating or twisting [Dr. Stephenson's] words'; and that his presentation 'convinced us to oppose the Dairy Market Stabilization Program even more vociferously than we had been doing before.'

The DBA says the report is the only available academic analysis of the Dairy Market Stabilization Act available, and that NMPF seems to be taking a 'pass-the-bill and ask questions later' approach to this legislation.

As Wisconsin Ag Connection reported earlier this week, the NMPF--which drafted the 'Foundation for the Future' program that DSA is based off of--accused opponents of the bill of being 'selective' when interpreting the professors' study. They claim the same formulas in the report can show different results based on how many dairy producers in the country voluntarily participate in the program. National Milk also pointed out in a press release that the study's authors admit that it's 'highly uncertain' for anyone to predict how many farms will sign on to the plan.

DBA, along with its subsidiary, the Dairy Business Milk Marketing Cooperative, and the Wisconsin Cheese Makers Association have all been expressing their opposition to the plan, while the Wisconsin Farm Bureau Federation says its better than the status-quo.

The Dairy Security Act, as currently introduced in the House of Representatives, would scrap the Milk Income Loss Contract program and the Dairy Price Support program; but instead would allow farmers to collect an insurance payment when the difference between the milk price and feed prices drop below profitable levels. It would also require producers to limit production for short periods to prevent steep milk price declines in the market.

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