Dairy Policy & Economics
July 27, 2009
Risk Management Expert Calls for Pricing Reform at House Dairy Hearing
The U.S. House Agriculture Subcommittee on Dairy, Livestock and Poultry held the second of three dairy hearings last Tuesday to review the status of the dairy economy. At the hearing, Chairman David Scott (D-GA) emphasized the subcommittee's willingness to hear a wide range of views on what can be done, both short- and long-term, to address current low farm milk prices.
Phil Ploard, president of Blingling and Associates, a firm that provides market-based risk management services for dairy producers, spoke about price volatility. He noted that while all agricultural commodities experience price swings, few dairy producers plan for and manage the risk. Ploard named the complexity of the current pricing structure under the Federal Milk Marketing Orders system as the reason that most dairy producers refrain from managing their price risk.
Following the testimony of five additional industry representatives, the chairman noted the lack of consensus on policies proposed, but he recognized a growing consensus on the need to simplify the federal milk pricing system and to improve price discovery.
IDFA Vice President Ruth Saunders attended the hearing, along with the following representatives who provided testimony.
Donald DeJong, Texas dairy farmer
Scott Hoese, president, Carver County Farmers Union, on behalf of National Farmers Union
Phil Plourd, president, Blimling and Associates, Inc./Roger W. Blimling, Inc.
Paul Rozwadowski, dairy farmer and dairy subcommittee chair for the National Family Farm Coalition
Ed Welch, president and CEO, Associated Milk Producers, Inc., on behalf of the Midwest Dairy Coalition
Everett Williams, dairy farmer, and President, Georgia Milk Producers, Inc.
A third hearing will be held July 28. For more information, contact Saunders at rsaunders@idfa.org.
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