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IDFA Releases Wide-Ranging Proposals for Dairy Policy Reform

Apr 20, 2011

IDFA has released more details regarding its dairy policy recommendations for the 2012 Farm Bill. The board members of its three constituent organizations -- the Milk Industry Foundation, the National Cheese Institute and the International Ice Cream Association -- soundly rejected the Foundation for the Future program proposed by the National Milk Producers Federation. They voted to support policy proposals that will allow for continued industry growth with new programs to assist dairy producers and a proposal to make the current Federal Milk Marketing Order system less complex.

"Producers and processors agree that current policies are getting in the way and that outdated policies and programs need to go," said Connie Tipton, IDFA president and CEO. "These positions reflect the recommendations of the U.S. Department of Agriculture's Dairy Industry Advisory Committee, are consistent with the policy changes recommended for the U.S. dairy industry in the Bain report and provide a roadmap to a prosperous future."

Instead of relying on a new mandatory government program to manipulate and limit milk supplies as does the Foundation for the Future program, IDFA's proposals will give dairy producers the tools they need to manage business risk and price volatility. IDFA supports establishing a new government-subsidized margin insurance program, as well as expanding programs such as Livestock Gross Margin - Dairy to assist producers when prices are low. IDFA's proposals also include the establishment of dairy farm savings accounts that will help remove incentives for dairy farmers to over-expand production when prices are favorable.

The goal of IDFA's proposal to reform the FMMO system is simplification; the current system is highly complex and discourages product innovation. NMPF's proposal, by contrast, retains a four-class system with a calculation for Class IV milk, which actually makes the system more complicated and fails to eliminate end-product pricing. By eliminating layers of regulation regarding milk pricing, IDFA's proposal will allow milk to flow to its highest and best use.

IDFA's proposals also recommend the elimination of the Dairy Product Price Support Program and the Dairy Export Incentive Program. The DPPSP would be replaced with the new programs to assist dairy producers, and the DEIP has been utilized sparingly in recent years because U.S. dairy prices have been competitive in world markets.

For more information, contact Jerry Slominski, IDFA senior vice president of legislative affairs and economic policy, at


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