Northeast Dairy Foods Association opposes market stabilization proposal

As Congress moves toward consideration of a 2012 Farm Bill during its “lame duck” session, not all dairy groups approve all elements of dairy title contained in both Senate and House Ag Committee versions.

In a letter to northeast congressional representatives and leaders in the House of Representatives, the Northeast Dairy Foods Association Inc. (NDA) expressed opposition to the bills’ current market stabilization program, instead urging including the Goodlatte-Simpson amendment.  

 

NDA supports passage (of the Farm Bill), but “strongly opposes the market stabilization policy being pushed through by producer groups,” according to Bruce Krupke, executive vice president.  “The northeast U.S. could soon become a region where there is not enough raw milk available for processing and manufacturing plants due to the increased production of yogurt and ultra-pasteurized dairy products.  Any national policy that discourages production will not benefit dairy producers and restrict growth in the entire industry.”

 

Established in 1928, NDA is a full service trade association with members in New York as well as surrounding states. Members include milk processors, distributors, cheese manufacturers, ice cream plants and dairy farm producers.

Following is a copy of the letter:

Earlier this fall, New York State Governor Andrew Cuomo held a first ever “Yogurt Summit” in Albany.  His purpose was to bring to the public’s and dairy industry’s attention to the growing dairy product processing and manufacturing sector.  Our association represents these companies.  Not only are new Greek style yogurt manufacturing plants being built or re-tooled, many other types of dairy food plants such as cheese and ultra-pasteurized products are expanding in the northeast as well.  

 

The main question before the entire dairy industry in the region is where is this new demand of raw milk to fill these plants going to come from?  In industry roundtable discussions held recently we have learned in 24 months, dairy farmers in the northeast will need to increase milk production as much as 1/5th of New York State’s current total. This equals 4 billion pounds of milk a year or the equivalent production of another 180,000 more cows!  There are ways we can meet this goal, it won’t be easy.

 

The reason I’m sharing this information with you is to ask for your help in preventing just the opposite from happening and jeopardizing this growth of manufacturing and jobs and milk production our region.

 

Included in the Dairy Title of the current proposed Farm Bill is a provision called market stabilization otherwise known as supply control.  We are opposed to this plan that would penalize any dairy farmer who has higher production when the program is in effect.  This plan would act as a disincentive to increase production for producers who want to expand and make more money.

 

If passed in its current form, the Farm Bill will actually mandate dairy farmer participation in market stabilization if they voluntarily participate in margin insurance. This action would be disastrous for the continued growth of dairy processing in the northeast.  If milk production is limited, manufacturers and processors will look to other areas of the country to move existing or build new plants. The supply control program will increase consumer prices for dairy products, reduce valuable dairy exports and discourage investments into new processing facilities in our region!   I strongly encourage you to contact a few of your local independent dairy farmers, ask them if they would like to be penalized for being efficient should they increase their production.  We have talked to them and they don’t!

 

Before you vote on the Farm bill, there is a fair compromise to consider.  We urge you to consider amending the Farm Bill and support the bipartisan Goodlatte/D.Scott amendment that will establish a safety net for dairy farmers without mandating that they participate in a new government dairy “supply management” program.  The compromise amendment will help dairy farmers through tough economic times, but removes the unnecessary regulatory burden on dairy businesses and will allow our industry to continue to expand, create new jobs, and help our economy to grow.