World Dairy Expo in Madison last week was another celebration of the dairy industry. The best dairy cattle from the continental United States and Canada were shown on the colored shavings of the Coliseum at the Alliant Energy Center and visitors came from about 90 foreign countries to see the latest in dairy technology and genetics. But it wasn’t all about the cows. For some it was about dairy policy and what might be put in place for the industry in a new farm bill.
The sides have been drawn for quite some time as the National Milk Producers Federation came out early with their Dairy Security Act which includes margin management insurance and a supply management provision for those dairymen who opt for the program. From the beginning that supply management provision has been vehemently opposed by some dairy groups, especially the Dairy Business Association, headquartered in Green Bay. Both sides were on the offensive last week in Madison to further their arguments for and against that portion of the bill that is already in a Senate passed farm bill and a bill that has passed out of the House Agriculture Committee but not the whole House.
Dairy Business Association leaders pointed out at a special news conference this past Thursday that under current dairy production levels, the Dairy Security Act, with supply management, would have kicked in five months ago and that dairy farmers would be looking at reduced milk checks because of that. According to DBA numbers, a 100 cow operator with average production, who was in the program, would have lost just over $1,700 while an operator with 1,000 cows would have lost $17,191 during the same time period. Supporters of revising the Dairy Security Act to eliminate supply management point to an amendment, the Goodlatte-Scott amendment in the House, that would offer margin insurance but without supply management and identifies new annual administrative fees for the program.
As support for their position, DBA officials brought in farmers from around the country to express their concerns about the supply management provision, which is the only part of the Dairy Security program they want changed. Mitch Davis from Davisco Foods, a cheese producer with plans to milk 9,000 cows by next June said supply management “is wrong because it’s not free market enterprise and it sends the wrong signal to our customers, especially those overseas.” Other farmers from Kentucky, Pennsylvania, New York, Michigan, Indiana and Wisconsin all cited the problems they see being caused by a supply management type program. One farmer ssaid it’s kind of crazy that as countries like Australia and Canada are looking at ways to end dairy supply management programs that the United States is thinking about establishing such a program.
But earlier in the week, Jerry Kozak, President and CEO of the National Milk Producers Federation was at World Dairy Expo to defend the Dairy Security Act and explain why DBA’s concerns are unfounded. In a conversation we had with Kozak on Wednesday in Madison, he called the Goodlatte-Scott amendment to end supply management in the Dairy Security act a “sham” and “hypocrisy.” Kozak called that amendment a classical supply management program because, according to Kozak, “it says if you have a base for five years and only 80% of your production goes under the base, then you can’t grow.” He said he was amazed DBA would support that amendment and say they are for a margin protection program that caps growth at 80% and doesn’t allow for future growth, especially in a state like Wisconsin that is growing milk production. Kozak said the amendment is actually much more limiting to future milk production than any provision in the Dairy Security Act. He also said he doesn’t expect the Goodlatte-Scott amendment will be part of any new farm bill since the leaders and minority leaders of both the House and Senate Agriculture Committees are in support of the entire Dairy Security Act package and also since the amendment was defeated in committee on a 29 to 17 vote, and according to Kozak, “that’s not close.”
The battle over dairy will rage on until we have a new farm bill which Kozak said will happen in the upcoming lame duck session, for a couple of reasons. He said it was the food stamp program, not dairy that prevented the Food, Farm and Jobs bill from being passed earlier. If Congress doesn’t pass it this year, the Tea Party will lose face because they will end up spending much more on food and nutrition programs than we are now and in the case of dairy, no new farm bill means reverting back to the 1949 bill which calls for parity in milk prices. That would lead to prices in the $38 to $40 a hundred range for dairy farmers and maybe more and force Congress to take separate action on dairy legislation.