New Dairy Legislation Sought by NFO

December 7, 1999

The National Farmers Organization says it will lobby Congress next year to build in a system of dairy price supports and supply management incentives to counter the volatility in milk prices that sent the basic formula price plummeting to the lowest level since August 1978. But that should be coupled with greater reliance on what producers can accomplish apart from government, says NFO.

The November basic formula price was announced at $9.79 per cwt., a decline of $1.70 from the previous month but more than $7 lower than the same time last year. "This nation's independent dairymen cannot possibly survive with these prices," said Gene Paul, president, NFO. "Steps must be taken immediately to bring base prices back to profitable levels."

NFO advocates a system of price supports and supply management incentives. However, producers "can petition their cooperatives to create marketing agencies-in-common (MAICs) by partnering with other organizations," said Paul. "This type of arrangement would help producers develop their own supply management programs with floor prices fair to both producers and consumers."

Implementing a "reasonable floor price" through a MAIC, dairy farmers can avoid devastatingly low base prices, according to NFO. Producers also should enroll more milk into national collective bargaining programs and donate surplus milk to charitable groups. By using collective bargaining, producers can increase competition for available supplies, argues NFO.