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Exports Drive Demand for Dairy; Supply Control Would Stunt Growth

Jul 13, 2011

Bloomberg News last week reported that U.S. cheese shipments surged to 175.4 million pounds in the first four months of 2011, up 68 percent from a year earlier, and milk output reached a record 17.27 billion pounds during May, according to data from the U.S. Department of Agriculture and U.S. Dairy Export Council.

The article quoted Dave Kurzawski, a risk-management consultant at INTL FCStone Inc., as saying, "The whole year has been marked by really good demand for dairy products. The real impetus has been from export demand."

An economic review of all available data and published research on the Dairy Market Stabilization Program (DMSP), a milk supply-control program proposed by the National Milk Producers Federation, shows that, if implemented, the program would curtail U. S. dairy export potential, slow American job growth in agriculture and increase domestic price volatility. The review, "A Look at Dairy Market Price Volatility and Options for Dairy Reform", written by IDFA Chief Economist Robert Yonkers, Ph.D., has been widely distributed to industry stakeholders and on Capitol Hill.

The risks of supply-control proposals and rewards of alternatives that would preserve dairy production and job growth have been key themes of recent IDFA member visits with legislators serving on the House and Senate Agriculture Committees to discuss the 2012 Farm Bill. To learn more and to join the PRO Dairy Coalition, visit www.keepdairystrong.com.

For more information, contact Jerry Slominski, IDFA senior vice president of legislation affairs and economic policy, at jslominski@idfa.org.

 
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