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Battle lines drawn over proposal

Published on July 22, 2011 3:01AM

Last changed on August 19, 2011 9:19AM

With a discussion draft on dairy reform now circulating in the U.S. House of Representatives, the National Milk Producers Federation is focused on gaining support for legislation modeled on its Foundation for the Future.

The draft, released by House Ag Committee Ranking Member Collin C. Peterson, D-Minn., is circulating with the hope legislators will sign on as original co-sponsors of a formal bill, said Chris Galen, the federation's senior vice president of communications. That will also be the case in the Senate, where the federation will push to get a companion bill, he said.

The organization also is conducting a 12-city tour to meet with dairymen one-on-one, he said.

"The feedback has been mostly positive, but we recognize there are still questions or misunderstandings among dairy producers," he said.

The federation is counting on cooperatives and producers to urge their elected officials to support the legislation, he said.

The proposal would eliminate the Dairy Product Price Support, a government program that buys product when per-pound prices fall below a certain level.

It would also eliminate the Milk Income Loss Contracts program, which subsidizes producers a percentage of the difference between a USDA set trigger price and the actual market price on milk sold for fluid consumption, with a cap of 3 million pounds of milk annually.

The International Dairy Foods Association has issued a statement slamming all components of the proposal. IDFA particularly opposes the supply-management portion, which it contends would limit milk production and harm a growing export market.

That program will manipulate farm milk prices to be above world market prices and negatively impact the U.S. industry's ability to compete in new and emerging markets, IDFA CEO Connie Tipton said in a statement.

"Dairy exports will be hurt, and imports will be encouraged," she said.

The federation contends the program protects against such a scenario with a clause that prevents supply-management from kicking in if U.S. prices are 20 percent higher or more above world prices on cheddar cheese and skim milk powder.

It also contends export opportunities will be enhanced with the elimination of the price support program, which encourages processors to produce products the government will buy instead of products the world wants.

-- Carol Ryan Dumas


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