Dairy Product Price Support Program
The current purchase program for supporting farm milk prices started with the Agricultural Act of 1949 and has been amended several times since then. The 2008 Farm Bill made a fundamental change in the milk support purchase program by specifying the support prices of purchased manufactured products, not the price of milk. The Commodity Credit Corporation (CCC) will buy butter, cheddar cheese and nonfat dry milk offered to it that meet specifications.
IDFA supports programs that will allow dairy farmers to manage risk and calls for the federal government to establish and subsidize a risk-insurance program for dairy farmers to replace the Dairy Product Price Support Program. The program has proven to be an ineffective safety net for dairy producers, and it hampers the industry's ability to compete by encouraging production of commodity products rather than products in demand in the marketplace.
IDFA believes that dairy market price swings would be better managed with risk-management tools, such as margin or revenue insurance, forward contracting and farm savings accounts.
