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Davis Sends Analysis Showing Supply Management Would Hurt Exports

May 09, 2012

Jon Davis, president and CEO of Davisco Foods International, followed up his recent testimony at a House Agriculture subcommittee hearing by providing IDFA's economic analysis of the Dairy Market Stabilization program. At the hearing, Ranking Member Dennis Cardoza (D-CA) asked to read the analysis, "A Look at Dairy Market Price Volatility and Options for Dairy Policy Reform," which concluded that data used in previous studies underestimates the program's likely impact on U.S. exports.

In his letter to Rep. Tom Rooney, chair of the House Agriculture Subcommittee on Dairy, Livestock and Poultry, Davis pointed out that none of the studies or analyses conducted on the expected impact of supply management has looked at how dairy companies will fare.

"None of them consider how U.S. dairy companies like ours will change how we look at export opportunities," Davis said. "The stabilization program will create significant market uncertainty and increase risk calculation for businesses that will discourage future long-term investments into new domestic facilities and new export markets."

At the hearing, Davis relayed a potential South Korean customer's concern that U.S. dairy companies wouldn't be reliable exporters if the United States implemented a supply management program. In the letter, Davis shared a similar story, reinforcing the growing reluctance of global customers to view U.S. companies as committed suppliers of milk ingredients for export markets.

"It is clear that the world is watching to see which path we take, and the supply management debate in Congress is already influencing our existing and potential customers' views,” Davis said.

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

 
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