National dairy group wants to support margins not milk prices

Washington Ag Today June 14, 2010 The National Milk Producers Federation’s Board of Directors has overwhelmingly agreed to move forward with a variety of changes in federal dairy policies. The package of concepts for reforming dairy policy is entitled “Foundation for the Future.”

Federation CEO Jerry Kozak says the reforms would shift the focus of dairy support.

Kozak: “By establishing a new program called the Dairy Producer Margin Protection Program and utilizing the resources of both the Dairy Product Price Support Program as well as the MILC, and converting those dollars into a much more effective safety net, that we are changing the way we look at dairy milk pricing. And that is refocusing to margin and not to prices.”

That portion of the program would be an insurance program tied to the margin between the national average cost of feed and the national average milk price. A producer could take just a basic level of coverage or buy up additional coverage. The program would be administered by the Farm Service Agency.

There is also a Dairy Market Stabilization Program that would send a signal to producers that an imbalance in the marketplace could result in lower farm level margins. When trigged a producer would not get paid on all the milk produced.

Kozak says the whole plan was designed to treat all dairy producers equally regardless of size or geographic location. The plan is to have this in the next farm bill if not on some other legislation before that.

I’m Bob Hoff and that’s Washington Ag Today on Northwest Aginfo Net.