Temporary MILC extension, restoration urged
A bipartisan group of 21 senators pressed House and Senate leaders to restore a key safety net for dairy farmers hard hit as the nationwide drought has increased the cost of feeding their herds.
Earlier this month, Milk Income Loss Contract (MILC) program coverage was significantly reduced, leaving producers unprotected during times of low milk prices and skyrocketing feed costs. The 2012 Farm Bill passed by the Senate put in place new policies that address the problem, but the House has yet to pass the bill, leaving dairy producers without an adequate safety net until a new policy is enacted.
"Dairy farmers across the country have benefited from the MILC program during difficult times and we fear that failure to maintain the program at its previous levels will saddle dairy farmers with significant risks as their feed prices continue to skyrocket," the senators wrote in a letter to Senate Majority Leader Harry Reid (D-Nev.) and House Speaker John Boehner (R-Ohio).
The full text of the senators' letter is below.
Dear Majority Leader Reid and Speaker Boehner:
Given the mounting challenges facing our nation’s dairy farmers, we write to bring a matter of particular concern to your attention.
On Sept. 1, 2012, the Milk Income Loss Contract program, which has provided a vital safety net to dairy farmers across the country during times of low milk prices and high input costs, began to provide coverage at a reduced level. The level of coverage is so low that the program is not expected to be triggered even in these times of high feed prices. Most concerning to us is the change in the program’s feed cost adjuster, which was created in the 2008 Farm Bill to address volatile swings in feed prices. This change in particular has put our farmers at far greater risk as this year’s drought continues to impact much of the country and drive up the cost of feed. In addition, instead of offering dairy farmers coverage at 45 percent of the difference between the target price and the actual price, the program now only provides coverage at 34 percent of this difference. The program’s volume cap has also declined, falling from 2.985 million to 2.4 million pounds per dairy farmer
We understand that the Senate-passed Farm Bill and the House Agriculture Committee’s Farm Bill both move to eliminate the MILC program in favor of a new policy. However, until a new Farm Bill has been enacted and USDA has a dairy program in place, we urge you to find the necessary offsets to maintain the MILC program at its previous coverage levels for the duration of any extension of current policy. Dairy farmers across the country have benefited from the MILC program during difficult times and we fear that failure to maintain the program at its previous levels will saddle dairy farmers with significant risks as their feed prices continue to skyrocket.
Thank you for your consideration of our request. We stand ready to work with you to address this critical issue for our nation’s dairy farmers.
Olympia J. Snowe
Joseph I. Lieberman
Robert P. Casey, JR.
Kirsten E. Gillibrand
Scott P. Brown
Kelly A. Ayotte