Dairy Provisions Fail to Address Concerns of Minnesota Dairy Farmers

Dairy Provisions Fail to Address Concerns of Minnesota Dairy Farmers

The Minnesota Milk Producers Association (MMPA) Board of Directors has voted to oppose the dairy provisions contained in the draft 2012 Farm Bill released last Friday by Senate Agriculture Committee Chairwoman Debbie Stabenow (D-MI). MMPA, which represents Minnesota dairy farmers, believes the bill does not adequately address the challenges facing Minnesota’s dairy farmers.

“We have been waiting to see legislative language which was finally released last Friday,” stated Pat Lunemann, MMPA President. “Since Friday, our leadership has had discussions with our membership and captured input from experts. While we do appreciate the work Chairwoman Stabenow has done to this point, changes are still warranted,” concluded Lunemann.

The proposed legislation must remove all language referring to “Milk Stabilization”. MMPA’s first priority is the long-term success of Minnesota dairy farmers. One major component of achieving this priority is to ensure that our dairy farmers have a solid infrastructure. Analysis of the current Senate language would force Minnesota dairy farmers to cut up to 6% of milk production – Today. Cutting back on production at a time when our Minnesota processing plants need more locally produced milk is a step in the wrong direction.

If our processing plants are required to cut back even more on their current levels of local milk, they may be forced out of business. If, or when that would happen, our Minnesota dairy farmers lose more infrastructure, leading to further decline in an industry that adds over 40,000 jobs and over 11.6 billion dollars of economic impact to Minnesota alone(1).

Second, while we applaud the inclusion of a margin insurance program for dairy in the proposed farm bill, it is not actuarially sound at the higher coverage levels. The premiums for higher levels of coverage must be adjusted. The premiums are currently structured in a manner that creates extra incentives for certain producers to keep producing more milk in order to receive hefty margins via insurance payments from the United States Department of Agriculture (USDA).

Third, dairy farmers deserve promised market reform. There is very little in terms of market reform in the proposed legislative language. The United States dairy industry must move toward a two tiered pricing system and it must move toward a competitive pay price. Also, there is no language that would put California under the Federal Milk Market Order system.

MMPA has remained consistent in describing the principles of a strong safety net for dairy farmers, including risk management without supply management and market reform for all US dairy producers with more transparent price discovery. The opportunity to achieve these principles exists within the context of the current Farm Bill debate.

(1)Minnesota Dairy Industry Profile, Su Ye, Minnesota Department of Agriculture 2011.
Minnesota Milk Producers Association serves as the “Voice of Minnesota’s Dairy Industry”, a grassroots organization for the industry with an elected board of dairy producer directors. Its mission is to advance the success of Minnesota dairy producers.

4.25.2012