Meanwhile; the “policy wars” continue as 90 senators voted in favor of bringing the farm bill to the floor for further consideration while the House Ag Committee has yet to begin its markup. A press release this week from the National Family Farm Coalition (NFFC) pointed out that, “Dairy farmers across the country struggle both financially and emotionally,” and charged that “the dairy pricing system is clearly broken.”

They report that the first five months of 2012 resulted in declining farm milk prices, putting thousands of dairy farmers out of business and many more on the brink of economic collapse, adding that the losses hurt not just dairy farmers and their families but thousands of farm-related businesses.

“Flawed trading practices at the Chicago Mercantile Exchange further diminish the value of struggling dairy farmers’ product,” according to the NFFC. “Ultimately, we rely more and more on dairy imports, leaving consumers with fewer safe and local choices, undermining our nation’s food security.”

The NFFC continues to support S. 1640, the Federal Milk Marketing Improvement Act of 2011, introduced by Sen. Bob Casey (D-Pa.), and NFFC leaders met with President Obama in August 2011 as part of the White House Rural Council meetings. “We continue to call for restructuring the nation’s dairy policy to save the family dairy farm,” the NFFC concluded.

On the other side of the battle, lawmakers were told by a Virginia dairy producer that “Dairy farmers need Congress to pass a new farm bill now to help provide certainty for making future business decisions.” Those were the words of Sarah Leonard, a fourth-generation dairy producer from Midland, Va., who spoke on behalf of National Milk at a Senate news conference this week about the Agriculture Reform, Food and Jobs Act of 2012 (the 2012 Farm Bill).

“On our farm, we don’t focus on the latest polls, or whose campaign is raising the most money,” Leonard explained. “We focus instead on how much rain we received last night, how much milk the cows are generating today, and what the market price of corn and soybeans are. That’s our daily reality. But, part of that reality is, we need a new farm bill.”

Processors, represented by the International Dairy Foods Association (IDFA), remain opposed to any kind of supply management feature for dairy. Speaking in Wednesday’s DairyLine radio program, IDFA’s Jerry Slominski began; “It’s a standard joke for a politician when asked to take a position to say I’ve got friends who are against it and friends who are for it and I’m with my friends.” He said he didn’t blame farmers if they are starting to feel the same way about economic studies of the proposed Dairy Security Act (DSA).  

He criticized a recent study of the DSA conducted by Dr. Scott Brown, charging that Brown “used stochastic modeling to predict that the new milk supply management program would seldom be in effect and that exports and milk prices would be nearly unchanged.”  “Stochastic” literally means “involving guesswork or conjecture,” Slominski explained.

“Instead of conjecture about what will happen, Drs. Andy Novakavic and Mark Stephenson looked at data from the past five years to see what actually would have happened,” Slominski said. “They found the supply management program would have been in effect nearly 20 percent of the time.”  

“They also found that farmers of nearly every size would have had more money withheld under the stabilization program than payments received under the margin protection plan. Only if cows are culled and feed savings accounted for did farmers end up in the black under the program,” he said.   

He added that “Farmers can cull cows, dry cows off earlier or reduce feed in order to reduce production and save costs. Yet, every one of those options have long-term implications for a farm’s milk production, and it’s very possible that many farmers won’t reduce production at all. In those cases, the Dairy Security Act directly results in lower net income to a farm, not more.”

“Producers would be better off if Congress dropped the supply management plan and offered a stand-alone margin protection plan,” Slominski concluded. “Premiums would be slightly higher, but producers would not have money withheld from their milk checks due to the stabilization program, nor would producers have to decide whether or not to adjust milk production in the short run and how.  This can easily be done by Congress without busting the budget.”   

The views and opinions expressed in this column are those of the author and not necessarily those of Farm World. Readers with questions or comments for Lee Mielke may write to him in care of this publication.