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Dairy Facts 2016

IDFA Says 'Yes' to Risk Management, 'No' to Supply Control

Apr 06, 2011

IDFA sent a letter last week to the leaders of the Senate and House of Representatives Committees on Agriculture urging them to find alternative solutions for combating higher milk prices that do not involve federal programs designed to limit milk production. In addition, IDFA called on Congress to maintain funding for the federal risk management insurance program for dairy farmers.

IDFA continues to oppose any government program aimed at restricting milk production for the purposes of manipulating higher milk prices. Government programs intended to rein in milk supply would inhibit export growth and adversely affect domestic consumption. The proposed federal programs also would hurt low-income families with children, as well as increase costs for U.S. Department of Agriculture nutrition programs.

In the letter, President and CEO Connie Tipton noted, "While we oppose programs that would have the government attempt to control price volatility, we strongly support programs that will provide dairy farmers with sufficient financial tools to manage inevitable price volatility."

Additional Funding to Help Dairy Farmers

Tipton said additional funding for the Livestock Gross Margin-Dairy program, offered by USDA, could alleviate stresses placed on dairy farmers from the worst economic recession since the Great Depression. Although the program found limited use in 2009 and 2010, Agriculture Secretary Tom Vilsack made important changes to the program, and USDA issued over 14,000 contracts so far in fiscal year 2011.

USDA is quickly approaching its underwriting capabilities for the LGM-Dairy program, so new contracts will be unavailable until the next fiscal year. The Risk Management Agency, which administers the underwriting capacity for livestock risk management programs, limited funding to $20 million this fiscal year.

"We are grateful that USDA has made $15 million of this available for the LGM-Dairy program," Tipton said. "However, that amount pales in comparison to the $3.5 billion the Risk Management Agency spent on the revenue insurance subsidies for corn, wheat and soybeans in 2010."

For more information, contact Ruth Saunders, IDFA vice president of policy and legislative affairs, at or (202) 220-3553.

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