BY RACHEL LANE

WASHINGTON, D.C. — Dairy has become one of the bigger focuses of 2018 farm bill discussions.

 

The 2014 farm bill has offered protection to farmers across the country to help mitigate dropping commodity prices. Between 2014-16 milk prices fell from $24 to

$16 per cwt., but dairy farmers did not have the farm bill programs in place to help. Last week, experts on the dairy industry gave testimony during a hearing in front

of members of the House Agriculture Committee.

 

“While we often say that the farm safety net is designed for times like these, the (Dairy) Margin Protection Program (MPP) in the 2014 farm bill has provided

virtually no assistance,” said Rep. Michael Conaway (R-Texas), chair of the committee. “Our farmers also face entry barriers from foreign competitors designed to

keep out U.S. dairy products.

 

“As we begin crafting the next farm bill, we must keep in mind the unique nature of the dairy industry in order to create effective policies for our dairy farmers.”

 

Jim Mulhern, president and CEO of the National Milk Producers Federation, said the industry has suffered in the last decade because of price fluctuation. The world dairy markets collapsed in the 2008 recession. At the time, the milk price-feed cost margin for

dairy farmers fell to $2.25 per cwt. In 2012, widespread drought increased feed prices and the profit margins for the dairy industry decreased again, he said.

 

“Many dairy farmers were unable to survive this period, and many of those that did are still struggling to recover fully,” Mulhern explained.

 

Typically, the record high prices in 2014 would have caused farmers to grow operations, but they were trying to make needed replacements to vehicles. In 2015, the

European Union increased milk production and most of the additional milk was sold on the world market, decreasing U.S. exports and the overall price of milk.

 

“I am here today to tell you what we all know – the Dairy Margin Protection Program is not working,” Mulhern said.

 

He said the problem was that the 2014 farm bill and the MPP relied on cost projections, which have been dramatically wrong in recent years. In addition to changes to the MPP, he said immigration reform is a key need for the industry. At the international

level, he said agreements with other countries have removed tariffs on U.S. dairy, which help exports but some actions by other countries have limited U.S. export abilities. In the European Union, geographical markers have limited the ability to sell feta cheese, for

example, while Canada changes regulations to place limitations on U.S. dairy imports.

 

Michael Dykes, president and CEO of International Dairy Foods Assoc., said there is a demand for dairy products and the U.S. industry is ready to take advantage of the need.

 

“I’m confident our industry will meet and increase the demand for milk and dairy products and provide economic prosperity and stability to American dairy companies,

American dairy farmers and their communities throughout the country,” he said.

 

He said product labeling changes are happening now, but it will take time for every product to be in compliance. The current requirement by the FDA would require

the changes to be complete by July 2018, except for smaller companies. Dykes would like to see that deadline extended to 2021.