The Senate Agriculture Committee met April 26 to markup a draft of the 2012 farm bill. When it concluded, it passed a bill titled the Agriculture Reform, Food and Jobs Act of 2012.

The bill contains major elements of the Dairy Security Act, introduced last fall by Reps. Collin Peterson (D-Minnesota) and Mike Simpson (R-Idaho), including a margin insurance program that replaces existing dairy programs, namely the MILC and Dairy Product Price Support programs.

The committee heard witness testimonials from several dairy industry representatives. The witness panel consisted of:

• Scott Brown, assistant research professor, Integrated Policy Group, Division of Applied Social Sciences, College of Agriculture, Food and Natural Resources, University of Missouri
• Patrick Joseph "Joe" Wright, V&W Farms, Inc., on behalf of Southeast Milk Inc., Avon Park, Florida
• Tom Barcellos, board president, Western United Dairymen, Porterville, California
• Jon Davis, chief executive officer, Davisco Foods International, Inc., on behalf of International Dairy Foods Association, Le Sueur, Minnesota
• Jerry Kozak, president and chief executive officer, National Milk Producers Federation (NMPF), Arlington, Virginia

The dairy industry leaders' respective stances on dairy policy reforms ranged from support to opposition.

To view the witnesses' complete testimonies, click here.

Wright
His group is "philosophically opposed" to supply management for the southeast region, said Wright.

"However, we are somewhat persuaded by the argument that our producers would benefit from a margin program linked to participation to a supply management plan even if we do not sign up.

"To the extent that producers in other regions of the country do participate in supply management, the market as a whole should move faster to a market equilibrium price. That should moderate, but not eliminate price volatility. Both producers and processors would benefit from less volatility."

He added, "We do view the Dairy Security Act as a whole to be a reasonable compromise that is trying to bring a very diverse industry together. If the Dairy Security Act passes as currently outlined, it would be a significant improvement over the present dairy safety net programs."

Barcellos
In his testimony, Barcellos stated, "There have been several improvements made to the plan during its development including the scaling-back of government involvement in market stabilization, making the program more responsive to the export market and allowing market stabilization to transition from mandatory to voluntary."

Barcellos also offered a different approach to the safety net program. "The way the Dairy Security Act and its later versions are written, dairy farmers have two options on a safety net: no program or one that uses a national feed cost calculation.

"The proposal that has been developed by Western United Dairymen is offered as a third choice... a margin program with a feed cost calculation using an average of the costs from the 10 states with the highest milk production volume."

Davis
At a press briefing, the Davisco CEO commented on the Senate’s draft of the farm bill. He is one of several dairy leaders who have joined with the International Dairy Foods Association in opposing the Market Stabilizition Program included in Senate Chairwoman Debbie Stabenow’s (D-Michigan) markup of the bill.

This group says the program will raise consumer prices, hurt exports, cost thousands of new jobs and stifle investments in new facilities.

Davis said, "We are a family business that both produces and buys a whole lot of milk.

"The Dairy Security Act intends to limit the production of that milk in order to try and manipulate the price of milk. In doing so, the act will limit our ability to increase our sales opportunities all around the world.”

Kozak
Aside from testimony at the House hearing, NMPF commented on the Senate’s draft farm bill language. “The primary elements of NMPF’s comprehensive dairy reform package are included in this legislative draft, for which we are grateful,” said Kozak, according to a recent news release.

Click here to read earlier coverage of NMPF's stance on dairy reform.

“This bill allows dairy farmers to better manage their risks, in a deliberate approach that offers a superior safety net, reduces government involvement in our industry, and positions our entire industry to compete in a global marketplace.

"It saves money compared to existing programs, and will be affordable and convenient for farmers to use. Critically, it treats all farmers equally and doesn’t produce regional or size-based outcomes that are inherently discriminatory.”  PD