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Farmers Union seeks stronger dairy safety net, trade priorities

Progressive Dairyman Editor Dave Natzke Published on 18 March 2017

National Farmers Union (NFU) delegates identified federal policy priorities – including a stronger dairy safety net – during the organization’s 115th Anniversary Convention. Nearly 500 family farmers and ranchers convened for the event in early March in San Diego, California.

The adopted policy book and special orders of business will guide the organization’s government affairs priorities over the next year and upcoming deliberations on the 2018 Farm Bill.

“As a family farmer- and rancher-led organization, our grassroots policy adoption process is the most important part of our annual convention,” said NFU president Roger Johnson.

NFU’s 136 delegates from 33 states approved policy priorities in six special orders of business. The dairy policy called for:

• A budget resolution to increase spending for an adequate dairy safety net,

• Programs that account for actual costs of production,

• An incentives-based inventory management program that recognizes the inelasticity of the dairy sector,

• Ad hoc disaster assistance and

• Trade policies that don’t disadvantage American dairy producers.

The full text of the dairy policy priority follows:

U.S. dairy farms are an important segment of our nation’s economy. As one of the world’s largest dairy producing nations, the industry provides roughly $140 billion in economic output, $29 billion in household earnings, and more than 900,000 jobs. The economics of the dairy sector over the last three years have forced producers to shutter dairy farms across the country. After reaching $24 a hundredweight in 2014, dairy prices quickly eroded, falling to $16 a hundredweight in 2016. In addition to prices well below the cost of production, volatility has continued to create challenges for producers. Cash receipts over the last three years demonstrate this volatility. In 2009, cash receipts were $24.3 billion, shooting up to $49.3 billion in 2014, and quickly falling to $34.2 billion in 2016. Exports increase and decrease by billions of dollars from year to year based on factors well beyond the control of producers, but which nonetheless greatly impact the financial health of their farms.

Despite the unfavorable economic conditions faced by dairy producers, U.S. milk production increased for the seventh consecutive year and the dairy herd continues to expand. The current dairy safety net, the Dairy Margin Protection Program (DMPP), has provided very little relief to struggling dairy producers. In 2016, about two thirds of milk production, or 140 billion pounds of production history, enrolled in DMPP, did not sign up for any buy-up coverage. It is widely recognized that the program has failed dairy producers. Looking forward there must be an acknowledgement, especially during the budget process, that producers paid millions of dollars into the program and did not receive assistance in troubling economic conditions. An adequate safety net must remain the goal for federal dairy policy. Congress and the administration must act to protect more dairy farmers from going out of business.

Ag trade protections sought

NFU delegates also recommended U.S. trade policy be designed to protect the interests and prices of U.S. producers, instead of serving as “bait” to achieve favorable trade agreements for other sectors of the economy.

Agricultural typically accounts for 7-10 percent of total U.S. exports, and the surplus in agricultural trade helps reduce the trade deficit, according to the NFU statement. However, a “deeply flawed trade agenda” has opened domestic markets to cheap, often low-quality food, fuel and fiber products.”

“The U.S. agricultural trade balance dropped over $26 billion from 2011 to 2016. International trade is an important part of successful family farming in the United States, but trade is not an end unto itself. Decreasing our national trade deficit will bring greater economic prosperity to U.S. agriculture and the broader economy. Current trade agreements do not appropriately prioritize eliminating the trade deficit and fail to address unfair practices, such as currency manipulation. NFU encourages the federal government to conduct a formal and thorough analysis of current agricultural trade agreements to determine their success at meeting their promised goals. NFU urges prioritization of eliminating the trade deficit in future trade agreements. To that end, future trade negotiations should focus on increasing agricultural exports and ensure domestic sovereignty for farm programs while limiting imports of cheap, low-quality agricultural products, as well as removal of rules and regulations from trade agreements that limit domestic laws affecting agricultural commodity prices, quantities, or labeling.”  end mark

Dave Natzke
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