DBA, WCMA oppose Dairy Security Act
The Wisconsin Dairy Business Association (DBA) and the Wisconsin Cheese Makers Association (WCMA) remain opposed to U.S. House Bill H.R. 3062, the Dairy Security Act. The dairy producer and processor organizations cited economic modeling which indicates Congressional Budget Office scoring for the program may be too low.
The Dairy Security Act, introduced by U.S. Rep. Collin Peterson (D-Minn.) and based on primary components of the National Milk Producers Federation’s Foundation for the Future program, includes a proposed "Dairy Market Stabilization" program, a provisions strongly opposed by DBA.
Dr. Mark Stephenson, director of Dairy Policy Analysis at the University of Wisconsin-Madison, created a systems dynamic economic model of the U.S. dairy industry with Professor Chuck Nicholson at California Polytechnic State University in 2005. The model has been used to examine multiple dairy policy concepts in recent years. Based on that modeling, DBA and WCMA said:
• the cost of the program to the government would be higher.
• milk price volatility would decline, but milk prices would also be slightly lower
• domestic dairy sales would increase, but lower prices would drive more farmers – especially smaller farmers – out of business.
• export volume would increase, but value of export sales would decline.
"The Dairy Security Act is bad policy," said Jerry Meissner, DBA president. "We recognize that volatility has been a real problem, but dairymen can't be willing to accept any type of change, just because it is something new. We don't need another dairy policy program of the same nature. Farmers need to be better educated on using risk management tools that are currently available. Our industry cannot afford this severe net revenue loss on every load of milk that farmers sell."