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Letters to the Editor: Milk consumption, supply management

PD Staff Published on 03 August 2011

Dear editor,

Just read your article on “Why is fluid milk consumption declining?” The one thing that you missed and the most important reason is – taste.

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Milk distributors have thinned it down until it is not real milk anymore. No dairy will admit to producing the kind of milk that is in the stores today.

Raising the federal standards for fluid milk would be a start for raising consumption. It has been proven in taste tests over and over again that high-solids milk tastes better. Consumers buy on taste in all foods.

From the looks of your picture, you probably are too young to have ever tasted real milk, unless you came from a dairy farm where you got a choice to drink your own milk.

John Rankin
Dairy producer
Faunsdale, Alabama

Dear editor,

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Oppose the hidden tax in the proposed supply management legislation.

As a dairy producer, I know how important dairy policy reform is to our future success and financial viability, and I appreciate that Rep. Colin Peterson (D-MN) is working so hard to make that reform happen by offering his draft legislation. But I am very disappointed to see what is clearly a hidden tax in the Dairy Market Stabilization Program included in the plan.

The program is designed to limit U.S. milk production by collecting taxes from dairy farmers when farm milk margins are low. According to some estimates, nearly $400 million would have been assessed against dairy farmers had this program been in effect in 2009. According to Rep. Peterson’s bill, half of this new dairy farmer assessment will be retained by the federal government to offset other spending.

Dairy does not directly benefit from these collected monies. Also, the basic level of margin insurance is limited to 75 percent of milk production instead of 90 percent. Will this be reduced again? Or eliminated with the advancement of a $14 trillion dollar national debt?

Are dairy producers aware of this diversion of their monies to Uncle Sam’s general fund?

We have been down this road before. Beginning in 1981, dairy farmers had to pay an assessment on all milk marketed from our farms to help reduce the national budget deficit.

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Under the proposed plan, the assessments will only come when we are already struggling with high costs of production together with low milk cost.

Finally, instead of being paid by all dairy farmers, the ones who will be assessed are those dairies growing in size to maintain their family business and better meet the growing world demand for our dairy products.

And that’s not all. These proposed reforms would change federal order prices regulations which, according to economic analysis, will increase the farm price for bottled milk and decrease the price of farm milk used for cheese.

Dairy producers can’t let their long-standing desire for policy reform cloud their vision of the proposed plans. Look carefully and see what is actually there versus what you have been sold in the name of reform.

Donald E. Niles, DVM
Dairy Dreams, LLC
Casco, Wisconsin

Dear editor,

After a very difficult few years, dairy farmers are finally catching a break. Prices are up, the immediate outlook is good and the conversation about dairy policy reform has begun in earnest. But I am afraid an outsized amount of attention is being focused on a proposal including elements that will have a very negative effect on our positive momentum.

Foundation for the Future, proposed by the National Milk Producers Association, may have some good points but those are outweighed by the bad. NMPF says it’s an all-or-nothing deal. I’m not buying the program. Let me tell you why.

We already have too much government in our business. We already have the FDA, EPA, OSHA and the IRS. NMPF’s solution to our problems is another mandatory government program. Their answer to volatility is a new “growth management” program, called Dairy Market Stabilization, that will add yet another layer of government intrusion into our businesses and dairy markets. I’d rather make my own decisions about how to run my business.

While NMPF claims that the so-called stabilization program will limit volatility, it will do so only at the expense of our growing export market, thereby killing the goose that lays the golden eggs. U.S. milk production increased about 15 percent, from 165 billion pounds in 2001 to nearly 193 billion pounds in 2010.

That growth would not have been possible if U.S. dairy exports had not more than doubled over that same period of time. So far this year more than 13 percent of U.S. farm milk production is accounted for by exports. There’s simply not nearly that much room for growth in our domestic markets.

The idea behind the stabilization program – that we need to limit milk production precisely when the world needs food – is wrongheaded. It makes more sense to eliminate the barriers that keep our products from getting to those who want to buy them.

What we need to get us through the down years like we have experienced recently is to have better and more access to existing government risk programs, such as LGM-Dairy, and to establish new ones like catastrophic margin insurance.

Before we start going down the path that Canada took, we need to recognize that while some Canadian farmers are doing quite well, overall, Canadian dairy farmers now produce less milk than they did in 1975. Canada’s largest dairy co-op, Agropur, is investing in the U.S. because there’s nowhere and no way to grow in their own country.

I give NMPF credit for starting the debate and putting some ideas on the table. They’ve worked hard and deserve our thanks. But, take it or leave it? What about making it better?

Jim Winn
Cottonwood Dairy
South Wayne, Wisconsin

Dear Editor,

I am compelled to respond to the July 1 column “Treatments that Kill” by Ben Yale.

His article, which is critical of using NMPF’s Dairy Market Stabilization Program to help protect and stabilize the margins of dairy farmers, fails to understand the larger purpose of this important proposal. Rather than address his exaggerations and incorrect assumptions, I will focus on the basic flaw in his column.

We are in a new era of livestock agriculture, where the milk price alone is no longer relevant. Given where the cost of production is today, we need a new, better safety net: one based on margins (the difference between milk prices and feed costs), not just the milk price.

It doesn’t matter that the price of milk is $20 when the cost of feed is $15, or the milk price is $12 and feed costs are $7; the relationship between the cost of production and the return on that product is the same, and so is the result: Dairy farmers lose equity.

So Mr. Yale’s argument that producers would have lost income earlier this spring through the DMSP completely misses the point and the purpose of DMSP. To play off of his medical analogy, DMSP is preventative medicine. During times when either prices drop or feed costs rise – or the combination – we need to send quick, unmistakable signals to farmers to temporarily slow the growth of their milk production.

That’s what the DMSP would do. As analysis by the Food and Agriculture Research Institute (FAPRI) shows about the program in 2009, prices and margins would have improved much quicker. The end result would have been an average $1.84 per hundredweight higher margin for the year.

Mr. Yale also failed to mention that in order to prevent us from losing export markets and/or seeing a surge of lower-priced imports, the DMSP would not activate if U.S. cheddar cheese or nonfat dry milk prices are 20 percent or more above world prices.

Current dairy policies have failed producers miserably. That’s why we need the complete set of programs that make up the Foundation for the Future dairy policy package: the DMSP, the Dairy Margin Protection Program and federal order reforms.

It is a new, innovative approach that will provide producers a real safety net. PD

Cornell Kasbergen
Dairyman
Tulare, California

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