World Dairy Diary

Elimination of Dairy Market Stabilization Program Defeated

An amendment that would have eliminated the market stabilization program for milk pricing in the current Farm Bill has been defeated. Lawmakers in the U.S. House Agriculture Committee this morning debated the measure proposed by Reps. Bob Goodlatte (R-Virginia) and David Scott (D-Georgia), which would provide a safety net for dairy producers without requiring them to participate in a supply management program, such as the Dairy Security Act that is already in the Senate’s version of the bill.

Goodlatte argued that their amendment is more in line with the overall Farm Bill making its way through Congress and would actually provide more support for smaller family dairy farms. He said that the margin insurance is simple and not tied to a convoluted supply management system, costs less for premiums, and even appeals to larger dairies. “These [big] dairy farms know that paying a modest premium for their production above the 250-cow level is a better deal for them than getting saddled with supply management.” Scott, the co-sponsor on the amendment, said the main point is that it would keep milk and dairy products affordable for consumers. “The stabilization program that our amendment would take out would artificially reduce the supply of milk throughout this country, thereby, increasing milk and dairy product prices for consumers,” he said, adding that economic times are too tough to do this.

But Ranking Member of the House Ag Committee Rep. Collin Peterson (D-MN) called the amendment a recipe for disaster. He pointed to the dairy collapse in 2009 as a prime example of why the current safety net in the bill is needed. “It was bad, but it would have been a heckuva lot worse [without the CWT program].” Peterson also said that 70 percent of producers paid for it while 30 percent got a free ride. And he disagreed with Scott’s contention about prices. “What a bunch of nonsense. We had the lowest milk prices in history [in 2009], and did anyone cut their prices at the retail level? No, they raised them. Give me a break!” Peterson was joined by committee chairman Rep. Frank Lucas (R-OK) in calling for the defeat of the amendment.

Listen to the debate from the House Agriculture Committee meeting here:
House Ag Committee hearing on Dairy Provisions of Farm Bill