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Dairy Facts 2016

Industry Leaders Call for Policy Reforms at House Dairy Hearing

Sep 18, 2006

Industry Leaders Call for Policy Reforms at House Dairy Hearing

Representatives from three IDFA dairy processors joined producers in calling for changes to federal dairy policies during a field hearing held Saturday in Fresno, Calif. Committee members of the U.S. House Agriculture Subcommittee on Department Operations, Oversight, Dairy, Nutrition and Forestry heard comments from Leprino Foods, Hilmar Cheese Company and Driftwood Dairy, as well as producers for Ahlem Farm Partnership regarding their thoughts on improving current dairy policies.

The need to update outdated policies was a theme heard throughout the hearing, with dairy farmers and processors alike calling for restructuring federal dairy subsidies, streamlining the Federal Milk Marketing Order system, and improving access to risk management and marketing assistance for all producers and processors.

"The next Farm Bill provides Congress with a tremendous opportunity to bring more cohesion to our fractured dairy programs and to recognize and rectify the unintended consequences of the well-intentioned but flawed programs in place today," said John Jeter, CEO of Hilmar Cheese Company.

Jeep Dolan, vice president of operations for Driftwood Dairy, joined other processor and producer speakers who said current dairy policy was meant to serve as an economic "safety net" for producers, but it now is a major distortion in the market. Dolan explained that current dairy programs provide more incentives for producers and their dairy cooperatives to generate and sell nonfat dry milk, butter and cheese to the U.S. government through the dairy price support program than to produce products to meet consumer demand.

"There have got to be better ways to support all dairy farmers equitably without having the government attempt to stabilize prices by purchasing surplus dairy products and then getting rid of them in ways that cause real disruptions in the flow of commerce," said Dolan. "The program should be phased out."

Sue Taylor, vice president of dairy policy and procurement for Leprino Foods, expressed her concerns about price volatility in the dairy marketplace and its effect on customers using fewer dairy products.

"Neither producers nor processors win when our ultimate consumers turn away from our product because of volatile prices," said Taylor. "Congress can help address this need by reinstating the dairy forward contracting program."

Speakers also suggested that the committee should dedicate federal dollars to help dairy farmers implement new farm technologies, such as methane digesters.

"What dairy farmers need is help dealing with real on-farm issues," said Sabino Harrera, a dairy farmer for Hilmar Cheese Company. "We certainly do not want money to go to new, hastily created programs like MILC or arcane, outmoded programs like the price support, but rather to programs that help grow our business."

The Fresno hearing is one of only a few to be held nationwide on this issue in preparation for developing new farm bill legislation.

To read the full testimony for each IDFA member, click here.

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Posted September 18, 2006

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