Wisconsin Ag Connection - DBA Asks Reps. to Reject Dairy Supply Management in Farm Bill

Wisconsin Ag News Headlines

DBA Asks Reps. to Reject Dairy Supply Management in Farm Bill
Wisconsin Ag Connection - 03/02/2012

A Wisconsin farm organization is standing by its opposition to a supply management proposal for pricing milk in the next farm bill. Kewaunee County dairy producer John Pagel, who is a leader of the Dairy Business Association and president of the newly-created Dairy Business Milk Marketing Cooperative, presented the groups' position on dairy supply management at an agriculture policy forum sponsored by Reps. Reid Ribble and Tom Petri last week.

Pagel explained that Wisconsin dairy exports increased by 8.6-percent from 2010 to 2011, to nearly $230 million. He says for that to continue, an ample supply of milk is required. Pagel also urged the Republican lawmakers to consider alternatives to supply management including better and more access to risk management tools such as farm savings accounts, supporting manufacturers for margin calls, expanding the Livestock Gross Margin-Dairy program, and creating a Dairy Margin Insurance Program with catastrophic coverage.

Minnesota Congressman Collin Peterson first introduced the supply management legislation last July, in which milk production will be reduced during periods of low margins. If a farmer produces more milk than allowed under the program, they will be charged a fee which will be deducted from their milk check.

Last fall, the DBA and DBMMC also publicly oppose the Dairy Security Act--which is based off of the National Milk Producers Federation's 'Foundation for the Future' program. That effort aims to eliminate the current dairy price support program and replace it with a safety net mechanism that would pay producers a settlement when milk prices fall below profitable levels.

NMPF says DSA would dump both of the current programs in lieu of a margin protection program, which would issue insurance payments when the difference between the milk price and feed prices drop below $4.00 per hundredweight of milk. Farms would also be able to sign-up for the Dairy Market Stabilization Program, designed to limit production for short periods to prevent steep milk price declines in the market or other prolonged low-margin profit situations.

Other Wisconsin Headlines