In a DairyLine broadcast to producers last week, Ruth Saunders, IDFA vice president of policy and legislative affairs, highlighted IDFA’s support for the Dairy Product Donation Program. She explained that it would lead to an increase in the farm milk price by providing funds to be used to increase sales of dairy products.
“IDFA is a strong supporter of the Dairy Product Donation Program, one of the elements of the dairy safety net included in the new Farm Bill. The program will help dairy farmers by increasing demand for dairy products when profitability dips catastrophically, such as the situation in 2009. The donation program would lead to an increase in the farm milk price by providing funds to be used to increase sales of dairy products.
“USDA has issued its final rule on the Margin Protection plan and is asking for comments, which are due by December 15th. IDFA has put our thoughts in, stressing the importance of proper timing and urging USDA to donate a variety of dairy products, and to use a variety of distribution methods including vouchers.
“We noted that the program must be able to start and stop quickly, as required by the statute, to avoid any market distortions that could harm dairy’s competitiveness. This may be difficult given that milk marketing orders have time lags between when farm milk is marketed, minimum prices are established and payment is made. According to the rules, USDA would not be allowed to store dairy products for giving out in the future; they would be required to immediately donate the products to needy consumers.
“We strongly believe that the program should spread donations across the full range of dairy products in order to minimize market disruptions. And, by including products with higher minimum regulated prices, especially fluid milk, the program we believe will have the best chance of achieving the greatest impact on farm milk prices.
“Donating refrigerated fluid milk could be a challenge. We proposed that USDA use vouchers, like a coupon, that consumers with low incomes could exchange for milk in the supermarket. We pointed out a number of effective voucher programs that USDA currently administers, and that has proven to be effective.
“Distribution methods that can accommodate a high volume of dairy products during short time intervals will provide the greatest and most immediate impact on farm milk price recovery – which is the principal goal of this new Farm Bill safety net program."