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NMPF: Dairy Security Act would have increased milk prices

Milk prices for Midwest dairy farmers would have been more than $1.00/cwt. higher last year if the proposed federal Dairy Security Act (DSA) program had been available to them, a national dairy industry official told cooperative farm leaders gathered for the Minnesota-Wisconsin Dairy Policy Conference.
Jim Mulhern, chief operating officer for the National Milk Producers Federation (NMPF) and a Wisconsin native, said a farmer with 200 cows, who purchased margin coverage at a level of $6.50/cwt., would have received more than $44,000 in additional payments in 2012 under the Dairy Security Act that is now pending before Congress.
The Dairy Security Act was approved by both the House and Senate Agriculture Committees during consideration of last year’s farm bill. The full Senate also approved the bill, but the House failed to vote on the farm bill last year, so Congress is now beginning efforts to pass a farm bill this year.
Mulhern said the Senate Agriculture Committee is expected to begin work on a new farm bill later this month, and the House Agriculture Committee likely will follow later this spring.
A margin insurance-only alternative proposed by milk processors is irresponsible, Mulhern said, because it would create price-depressing milk surpluses and potentially cost billions of dollars. In addition, realistic insurance rates under a margin-only program would have to be much higher than those proposed in the Dairy Security Act in order to cover a greater portion of the cost of such a program.