Pro-Ag letter to Congress

Progressive Agriculture Organization                                                                           1300 Rattlesnake Hill Road                                                                                                          Meshoppen, Pa 18630                                                                                                                         Phone - 570 - 833 – 5776                                                                                                                          Fax - 570-833-5992         Cell – 570 – 313 - 7209                                                                progressiveagricultureorg@gmail.com

 

                                                                                     April 24, 2012

 

To All Pennsylvania Members of the US House of Representatives

From: Arden Tewksbury, Manager; Pro-Ag

 

The Livestock, Dairy and Poultry Sub-Committee of the US House of Representatives Agriculture Committee will be holding an important hearing in Washington DC on Thursday, April 26, 2012.

I assume the Sub-Committee will be receiving testimony regarding dairy provisions that may become part of a new Farm Bill.

The most critical items that are confronting the majority of dairy farmers all across the United States are:

1. Continued low and unstable prices paid to dairy farmers
2. The continued high input costs that all dairy farmers are facing
3. An inadequate pricing system that is used by the United States Department of Agriculture to determine the price paid to dairy farmers for their milk.

All dairy farmers continue to try to tighten their belts to offset their high costs of producing milk.

Let me make it simple and right to the point.  The present pricing system used by the USDA does not take into consideration the cost of production experienced by our dairy farmers.  This must change!

Currently many members of Congress appear to be supporting the Dairy Security Act (HB 3062) that has been introduced in the House of Representatives, and has been referred to the House Agriculture Committee. Unfortunately this bill is not geared to establish a new pricing formula for dairy farmers that considers their cost of production.  How can dairy farmers continue to operate if they can’t receive a fair price for their milk?

The Peterson Bill HB3062 mandates that the US government subsidizes an insurance plan to cover some of the dairy farmers’ losses.  This bill also allows dairy farmers to take out some additional insurance to cover more of their losses.  At best these insurance programs might cover 30% of the dairy farmers’ losses.

We urge you to take appropriate,necessary action to prevent the Peterson bill from becoming a part of any pricing formula to price milk to dairy farmers.  There is a proposed dairy bill that has been introduced in the US Senate by Senator Robert P. Casey, Jr. (D-PA).  The bill is called the Federal Milk Marketing Improvement Act (S-1640).

S-1640 contains several important provisions that will enable dairy farmers to have a fighting chance to survive.  I will list a few of them:

      1) All milk used to manufacture dairy products will have the same value, and will be classified as Class II milk.  The Class II milk is for classification purposes only.  This milk must meet the same high standards of quality as milk used for drinking purposes.

      2) The value of Class II milk will be determined by a national survey of the cost of producing milk on dairy farms in various sections of the US.  This survey is currently being done by the Economic Research Service, a division of the USDA, but it is not used in the current pricing system.

The ERS publishes the National Average Cost of Production on a monthly basis.  The National Average Cost of Production will become the value of Class II milk.  This pricing system will keep dairy farmers and dairy product manufacturers on a National competitive basis. We have never had this.  

1. Existing Class I differentials will be added to the Class II price to determine the value of Class I milk.
2. S-1640 contains a milk supply management program that will be used in case there is over-production of milk.  This program will be paid for by dairy farmers and not the US government.
3. The funds collected under the supply management program will be used to purchase dairy products and the products would be donated to various needy programs, such as food pantries, etc.
4. The bill mandates that imported, unneeded dairy products and/or dairy ingredients will not be allowed to destroy dairy farmers pay prices.  S-1640 is fair to dairy farmers, consumers, and to milk producers.

Conclusion: Dairy farmers need a new pricing formula that will cover the National Average Cost of Production, and will allow dairy farmers the opportunity to generate a profit on their dairy farms.

Please remember in several sections of the US the rural economy is deteriorating.  The beauty of S-1640 is that it is not geared to cost the government any funds.

Again, with all due respect to Rep. Collin Peterson’s efforts, his bill just won’t solve the dairy farmers’ financial crisis.  The Federal Milk Marketing Improvement Act will.

On May 1 the USDA will announce the National Average Cost of Production at $23.00 per hundred weight (cwt.) or higher.

Prices paid to dairy farmers will be at least $7.00 per cwt. less than this cost.

Dairy farmers need S-1640 to continue to stay on their farms.

 

Sincerely,

 

Arden Tewksbury