Dairy processors gathered in Miami this week for the International Dairy Foods Association’s annual Dairy Forum and federal dairy policy issues were a major focus of discussion, according to Dairy Profit Weekly editor Dave Natzke.
“With signs of an economic recovery, but tighter federal budgets ahead, dairy provisions of the 2012 Farm Bill are now the focus,” Natzke reported, and in her annual address, IDFA’s president and CEO Connie Tipton said the dairy industry is at a crossroads in federal policy. Tipton called 2009 a “Great Depression” for dairy farmers, with large losses of income and equity but she warned that “short-term economic pain should not direct longer-term dairy policy.”
Tipton said price volatility was the biggest issue facing both processors and farmers, and that current policies increase that volatility. To help change the course, Tipton said IDFA supports simplifying the federal market order system and improving margin insurance and risk management programs for farmers.
Tipton and National Milk Producers Federation’s Jerry Kozak appeared together to provide processor and producer views on dairy policy. And, while the two segments of the industry are closer to agreement on many issues than ever before, one area where they face a possible collision course is over supply management, according to Natzke.
National Milk’s Foundation for the Future (FFTF) proposal would withhold a percentage of milk payments from farmers who surpass their base production, at times when farmer income margins are small, as a market signal to reduce milk production.
IDFA used the Dairy Forum to unveil a study showing the economic impact of the plan, had it been in place in the past decade. It showed about $626 million would have been deducted from U.S. dairy farmers’ milk checks during the period, with producers in the Midwest and Northeast among the hardest hit.
Kozak countered that the deductions would be working in concert with income margin insurance payments, offsetting the overall income declines suggested by IDFA’s study, Natzke concluded.