Wisconsin congressional delegation concerned with market stabilization program

Source: Dairy Business Association

Numerous members of the Wisconsin congressional delegation sent a Letter to House Ag Committee chair Frank Lucas (R-Okla.) and ranking member Collin Peterson (D-Minn.), supporting much of the Dairy Security Act, but opposed to the Dairy Market Stabilization Program (DMSP) it contains.

Signing on to the letter were U.S. Reps. Sean Duffy, Tom Petri and Jim Sensenbrenner Jr., Republicans; and Democrats Mark Pocan and Ron Kind. None of the lawmakers serve on the House Ag Committee.

In the letter, the Wisconsin lawmakers said the state's dairy industry – including producers, processors, suppliers and state government – had worked hard to reverse declining milk production and infrastructure. Wisconsin's manufacturing capacity increased, and the state needs a growing milk supply to meet increased manufacturing and export demand, they said.

The letter supported risk management tools, including a margin-based protection program.

“We are particularly supportive of proposals included in last year's farm bill as passed by the Senate and the House Agriculture Committee that would adjust the supplemental margin insurance program to provide reduced premiums for every farmer’s first 4 million lbs. of production,” the letter stated. “We believe that this provision will benefit all dairy farms in Wisconsin, particularly small farms with roughly 200 or fewer cows, and urge that it be incorporated into this year's farm bill.”

However, the group expressed concern over the market stabilization program.

“Creating a new program that will penalize milk production in Wisconsin in order to manage overproduction in another area is unfair to our state's dairy industry, particularly after the collaborative efforts that have been made to turn Wisconsin dairy around.”

They also said the stabilization program would unintentionally place additional financial pressure on Wisconsin's small- and medium-sized dairy farms, which may have difficulty adjusting production levels quickly to meet reductions imposed when the stabilization program is triggered.

Finally, they believe the stabilization program could not be designed in a way that would avoid a negative impact on trade.

"While I support better risk management tools to hedge against losses in the dairy industry, market stabilization could negatively impact Wisconsin's ability to export milk due to the threat of an inconsistent supply,” said Sensenbrenner. “DMSP would create additional government intrusion – keeping prices artificially high, wasting government funds and stifling job growth. We should not deter dairy farmers from producing additional milk in order to manage over-production in other areas. It is important to ensure the Agriculture Committee is aware of dairy's importance to Wisconsin and our milk producers are not unintentionally hurt by a bill intended to help American farmers." 

"The Wisconsin dairy industry has seen tremendous growth in recent years driven primarily from exports,” said Duffy. “The controversial supply management program included in last year's farm bill would threaten that growth and Wisconsin jobs. Removing this provision will make it easier to get a farm bill passed as soon as possible, giving Wisconsin's dairy industry the best opportunity to flourish in the future."  

“While the stabilization program continues to be divisive, a compromise approach of providing a risk management safety net, like margin protection, would enjoy bipartisan support and would not only help dairy farmers, but would help move the farm bill forward,” they concluded.