Recently National Milk Producers Federation (NMPF) held their spring board meeting. New officers were elected, and a new approach to reforming dairy policy called “Foundation for the Future” was approved. Read on to learn more.
New Board Elected
John Underwood was elected the Third Vice Chairman of NMPF, representing Northwest Dairy Association in Seattle, Wash. The new Board members include: Mickey Childers of Somerville, Alabama, representing Dairy Farmers of America, Inc.; Dan Senestraro of Johnson, Kansas, also representing Dairy Farmers of America; and Jim Werkhoven of Monroe, WA, representing the Northwest Dairy Association.
“Foundation for the Future.”
The features of NMPF’s Foundation for the Future plan include: transitioning the existing safety nets of the Dairy Product Price Support and Milk Income Loss Contract programs into a new Dairy Producer Margin Protection Program to guard against periods of severe financial pressures; establishing a Dairy Market Stabilization Program to help address periodic imbalances in milk production and demand; and reforming the Federal Milk Marketing Order program.
NMPF President and CEO Jerry Kozak said that the Foundation for the Future is the result of 12 months of detailed deliberations concerning the most appropriate course to follow in reforming federal dairy policies, some of which have been in place for many decades. He added that the package will be used as the basis for the future direction of the dairy provisions in the next Farm Bill, or in some other form of federal legislation that Congress may consider in the future.
The Federation’s proposal to revamp the federal safety net involves creating an insurance program tied to the margin between the national average cost of feed, and the national average all‐milk price. After farmers choose to enroll in the base level of the Dairy Producer Margin Protection Program at no cost to them, they would receive indemnity payments during periods when their margins are severely compressed, as they were for most of 2009. In addition, farmers would have the option of purchasing supplemental coverage to protect a higher margin level between feed costs and milk prices.
Another key element of the Foundation for the Future will be a Dairy Market Stabilization Program that sends a signal to producers that an imbalance in the marketplace could result in lower farm‐level margins. Like the Dairy Producer Margin Protection Program, the Stabilization Program is tied to farmers’ margins that could be reduced either by low milk prices and/or high feed costs.
The Stabilization Program was shaped by some key principles: that it allows for the growth of U.S. production, doesn’t encourage imports or hinder exports, and keeps government intervention at a minimum.
Lastly, the Foundation for the Future also calls for changes in the Federal Milk Marketing Order program to create a competitive milk price, maintain Class I differentials, and eliminate unpopular aspects of the current system, such as make allowances. The changes in the Federal Order system are intended to be revenue neutral so that farmers’ milk checks are not adversely impacted.