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IDFA Point to Long Term Dairy Changes

05 August 2009

US - International Dairy Foods Association (IDFA) has responded with concern to the United States Department of Agriculture (USDA) announcement of a $1 Billion fund in support of dairy farmers.

The IDFA said it will continue to advocate for long-term reform of dairy policies in response to Secretary Tom Vilsack's announcement earlier  that the U.S. Department of Agriculture will provide additional short-term financial assistance to dairy farmers.

The Secretary announced that USDA will increase government purchases of butter, cheese and nonfat dry milk; spend more than $1 billion this year in support of dairy farmers; and begin a review of dairy policies.

"Dairy farmers are our partners and are critical to maintaining a strong and viable dairy industry," said Connie Tipton, president and CEO of IDFA. "We recognize that Secretary Vilsack is responding to the current difficulties faced by many farmers, but everyone should be concerned that we will be right back here in a few years unless we review and update existing dairy policies."

According to IDFA, the current low dairy prices are due to the economic downturn, a decline in global demand for dairy products and an increasing milk supply. IDFA believes that current dairy policies, which have been in place since the Great Depression, discourage innovation in dairy manufacturing and the use of risk management tools that are routinely used by other U.S. farmers.

Dairy is the only agricultural commodity for which USDA purchases surplus dairy products for government storage and determines prices through government regulation.

"Our members are concerned that an increase in government purchases of products, such as nonfat dry milk, does very little to expand the demand for nutritious dairy products, which is how our industry can grow," said Tipton.

IDFA Chairman Paul Kruse, who is president and CEO of Texas-based Blue Bell Creameries, outlined IDFA's recommendations for long-term policy changes when he testified earlier this month before the U.S. House Agriculture Subcommittee on Dairy, Livestock and Poultry, which sets dairy policy for USDA. Kruse told the panel that product innovation and increased global demand are fundamental parts of any solution designed to address the economic conditions currently facing the U.S. dairy industry.

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