The Senate Agriculture Committee held a hearing this week on the commodity and credit titles of the 2018 farm bill that included discussions on risk management tools and trends. IDFA submitted written testimony highlighting the importance of incorporating dairy policy provisions that will enhance demand for U.S. dairy products at home and in global markets.
“First and foremost, the dairy industry needs better mechanisms for risk management – and that’s on both the farm and processor side,” said Michael Dykes, D.V.M., IDFA president and CEO, in the written testimony. “Forward contracting has provided an important mechanism for manufacturers to directly contract with individual farmers or their cooperatives at a fixed price to reduce price volatility,” he continued, adding, “This program should now be expanded to include all classes of milk and be made permanent.”
Many other aspects of the current milk pricing regulatory system should be reviewed in the context of today’s consumer trends and global marketplace, Dykes said. “The system’s underlying assumption that beverage milk can bear a significantly higher price burden may no longer be accurate in today’s highly competitive beverage market in which fluid milk sales continue to decline,” he explained.
Noting that IDFA is working with the National Milk Producers Federation to improve risk management for farmers and processors, Dykes said he would keep committee members apprised of their progress to develop a comprehensive solution.
In addition, Dykes highlighted four other policy areas that are important to the dairy industry, including federal feeding programs, product labeling changes, trade agreements and organic dairy products.
SNAP and USDA Nutrition Programs
Dykes said IDFA would like to work with Congress to explore options to provide participants in the Supplemental Nutrition Assistance Program (SNAP) with additional incentives to choose milk and dairy products.
He also mentioned the decline in milk consumption that has taken place since the government restricted the types of milk allowed to be sold as part of the federal school breakfast and lunch programs. He emphasized the importance of offering milk choices that students want to drink and commended recent steps by Congress and USDA to expand those choices.
Product Labeling Changes
IDFA and the entire food and beverage industry had asked for compliance deadlines to be extended for the Food and Drug Administration’s Nutrition Facts label and serving size changes. Although FDA has agreed to extend the deadline, no date has been set yet, and Dykes expressed hope that the administration will ultimately align the compliance dates for the Nutrition Facts changes with USDA’s disclosure standard for bioengineered foods.
Trade
IDFA wants to ensure that the renegotiation of the North American Free Trade Agreement (NAFTA) will preserve the market with Mexico, while addressing Canada’s protectionist dairy policies and exorbitant tariffs on U.S. dairy products, Dykes said.
The United States also must forge new trade agreements, starting with the emerging economies of the Asia-Pacific region, where dairy consumption is rapidly rising. Failure to do so will allow other dairy exporting countries to gain a stronger foothold in lucrative dairy markets and cause U.S. dairy to fall behind with critical trading partners, like Japan and Vietnam, he said.
Organic Dairy Products
IDFA supports the National Organic Program and the allocation of resources necessary to ensure that the program accommodates the continued growth of the U.S. organic dairy industry.
Hearing Panelists
The 17 panelists who spoke during the hearing represented farms and farm organizations, including Ken Nobis, owner of Nobis Dairy Farm and president of the Michigan Milk Producers Association, a new member of the Milk Industry Foundation and the National Cheese Institute. Nobis provided testimony that aligned with many of the requests IDFA highlighted in its testimony. Read Nobis’s testimony here.
For more information, contact Dave Carlin, IDFA senior vice president of legislative affairs and economic policy, at dcarlin@idfa.org.