10 July 2007

4 minute read

North America

Released over the weekend by Representative Collin Peterson (D-MN), the "Chairman's mark" substantially alters the dairy policies recommended by the Dairy Subcommittee. IDFA calls on House Agriculture Committee members to respect the work of the Subcommittee and reject these new dairy provisions.

"This repudiation of the policy set forth by the Dairy Subcommittee disrupts a delicate balance struck by the Subcommittee, and takes our dairy policies in the wrong direction domestically and in a global marketplace," said IDFA President and CEO Connie Tipton. "This is a real disappointment as we have been trying to work with the Chairman to take advantage of the ripe opportunity to make dairy policy more progressive and effective for both farmers and manufacturers."

"When the Farm Bill's entire dairy policy package is reworked by the Chairman," she added, "you have to wonder why they even bothered to have issues reviewed and passed by subcommittees."

IDFA is concerned that the chairman's plan: 1) provides a forward contracting program that is merely window dressing and wouldn't be effective in giving dairy buyers and sellers tools they sorely need to manage enormous price fluctuations; 2) mandates the use of government subsidies for dairy exports at a time when U.S. dairy commercial export opportunities are growing and driving dairy markets to record high prices; 3) implements past legislation that will add new taxes on all dairy imports; and 4) adds more regulatory process to the already cumbersome Federal Milk Marketing Order system.

"The forward contracting plan in the Chairman's mark won't give dairy buyers and sellers the choices they desperately need to manage enormous price fluctuations," noted Tipton. "The changes recommended by the Chairman are an attempt to strongly dissuade processors from entering forward contracts, effectively gutting the program. We also feel that this program has been tested and should now be made available as a permanent risk management tool for dairy."

And at a time when commercial export opportunities are growing and driving dairy markets to record high prices, the Chairman's mark mandates the use of government subsidies for dairy exports and adds new taxes on all dairy imports.

"These are both measures that risk trade retaliation," said Tipton, "and they do nothing to bolster the market position and growth of the U.S. dairy industry."

Yet another disappointment is the Chairman's recommendation to throw out the work of the Dairy Subcommittee in presenting a streamlined Federal Milk Marketing Order decision process. The Chairman's mark tosses aside the tighter timeframes recommended by the Subcommittee and instead adds more regulatory process to the already cumbersome Federal Milk Marketing Order system.

IDFA continues to strongly support establishing a commission to resolve the regional conflicts being created by the current Federal Milk Marketing Order milk pricing system, something that, as yet, has not been included in either the Subcommittee bill or the Chairman's recommendations.

"All in all, there seems to be no reality check on any of these dairy issues," Tipton said. "This is a real disappointment when we have such a good opportunity to make dairy more progressive by providing a safety net for our farmers that will work under a variety of market conditions and helps the dairy industry take advantage of growing global markets."

IDFA remains concerned as well with the direction of the U.S. sugar program. "The Chairman's bill is a double whammy for dairy processors," concluded Tipton. "Regressive dairy policies on top of a more expensive sugar program indicates the Chairman has little concern about securing a successful future for ice cream, milk and cheese makers in this country."

IDFA will continue to work with Congress on supporting progressive, effective dairy policies for the future of the U.S. dairy industry.

The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 530 companies representing a $90-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi- national organizations to single-plant companies. Together they represent more than 85% of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.

TheCattleSite News Desk