Milk Producers Outline Policy Stance

April 6, 2001

The National Milk Producers Federation has outlined for the House Agriculture Committee a wide-ranging series of policy requests focused on the future of dairy policy for the next farm bill. NMPF Chief Executive Officer Jerry Kozak said "economic policies alone do not hold the key to the future of U.S. dairy producers," but that animal health, environment, trade and taxes also were "important to the economic bottom line of the domestic dairy producer community."

NMPF wants the current price support program maintained under which USDA purchases surplus dairy products at a farm-level price of $9.90 per hundredweight. That program, which is set to expire at the end of this year, should be extended not only through 2002, but also through the duration of the next farm bill, Kozak said. The price support system "represents a modest investment by the federal government in a program that will return tangible benefits to dairy farmers at a low cost to taxpayers."

He asked that Congress oppose any adjustment in the price support purchase levels for butter and skim milk powder products, out of concern that "tilting" the $9.90/cwt. purchase price away from powder would greatly reduce the income-protecting features of the program.

Kozak also advocated the creation of a supplemental income program for dairy farmers tied to the price level of Class III and IV dairy products (which are based on the market prices of cheese and butter/powder products, respectively). NMPF has proposed that Congress fund a target price program whereby producers would receive supplemental monthly income if the Class III and IV prices drop below $11.08/cwt. The payments would be based on the amount of Class III and IV milk production in each of the eleven Federal Order regions, and also state order and non-pooled regions.

NMPF is asking the House to fund a seven-year, $1.3 billion program to help dairy and beef cattle producers voluntarily test their animals for the Johne's bacterium. The funding would be administered through state veterinary offices and would help defray the cost of the tests and also pay for part of the economic loss of animals that have to be culled if they test positive. Kozak said the Johne's program "was developed in consultation with leading animal agriculture and veterinary groups, and represents our best opportunity to provide voluntary incentives to control this livestock disorder."