Most groups look for economic analysis before considering jumping on board

By CAROL RYAN DUMAS

Capital Press

Dairy organizations say they need time to review the two bills in Congress and a proposal by the National Milk Producers Federation to reform national dairy policy before supporting any of the plans.

"At this point, we've not endorsed any of them," said Jay Gordon, executive director of Washington State Dairy Federation. "We want to see the analysis on these concepts. Is this going to solve some of the volatility?"

Gordon said producers in his organization would need to know how the proposals address stability for producers and consumers, and whether they would grow exports or attract imports.

Legislation introduced by Sen. Bernie Sanders, I-Vt., in the Senate and Rep. Bob Costa, D-Calif., in the House focus on milk supply management.

National Milk's plan would overhaul federal milk marketing orders and replace the current government safety net with an insurance plan based on milk-feed margins.

Producers have suffered under the price-discovery system based on cheese traded on the Chicago Mercantile Exchange and under federal milk market orders, Gordon said. National Milk's proposal to do away with make allowances for processors would be welcomed by producers.

They guarantee processors will make a profit on production whether or not they make a profit at market. Gordon said that's the wrong signal to be sending.

National Milk also wants to eliminate the Milk Income Loss Contracts and the Dairy Price Support Program and replace them with insurance-based support, similar to programs utilized by most other commodity groups.

MILC has a bias in favor of small producers, Gordon said. It sets up a signal when the price is low for small farms to keep producing milk up to the volume cap on payments, he said.

The supply management bills and National Milk's plan try to get the signal back to producers when demand isn't keeping up with production, he said.

Rob Vandenheuvel, general manager of the Milk Producers Council, representing California dairy families, said his organization has been an advocate for the supply management plan offered in the congressional bills. But milk producers see value in National Milk's proposal on market order reform and an insurance plan.

Vandenheuvel said the bills would put all producers, regardless of size or location, on the same playing field. It should also help young producers get into the dairy business.

"What hinders young producers is fear of the unknown and ... the lack of availability of financing," he said. "What hinders them is the booms and busts of this industry."

The supply management proposal isn't aimed at stopping planned expansion, it's aimed at stopping the incremental, unconscious expansion that has hurt the industry, Vandenheuvel said.

"It will also help the government function as a referee to ensure everyone participates," he said.

Gordon also said federal involvement would be key to make any reform successful.

"The only one who can make it work with 100 percent participation is Congress," he said.

Jim Krahn, executive director or Oregon Dairy Farmers Association, said his organization supports supply management, in general.

"The only way to determine if a plan is good or isn't good is the economic return to producers," Krahn said. A successful plan will have to benefit producers and be politically passable, he said.

Jamie Bledsoe, chairman of Western United Dairymen, said the organization's members don't have consensus on any one plan.

"If we're going to make a big fix, we don't want it to do any harm," he said.

Mike Roth, president of Idaho Dairymen's Association, said the organization's board will examine all plans.

"IDA really cannot yet say if producers have an opinion yet because it is really just getting going," Rosh said.