NMPF Seeks Support for Foundation

News Editor

National Milk Federation is working to bring Foundation for the Future to the attention of the new lawmakers.

Increased feed prices are eating up any improved returns farmers see for their milk, the National Milk Producers Federation has said. So the group is pushing Congress to consider a new type of program well before next year’s rewrite of federal farm policy.

The federation, which represents farmers’ bargaining cooperatives, has proposed a margin insurance program to be supported with a combination of government money and fees charged to farmers and administered by the U.S. Department of Agriculture. The program would pay farmers when high feed prices or low milk prices — or both — undermine their typical operating margins.

The program has been in development since last year, but the NMPF now is dealing with a different cast of lawmakers in the House, dominated by Republicans who are sour on farm subsidies, government-sponsored insurance and many other domestic programs. Any program that increases federal spending is a tough sell to the new majority, although the NMPF figures the government can pay for its proposal by dismantling subsidies now paid to farmers when milk prices are low. The current dairy program costs about $102 million annually.

“We’re optimistic that we will get the stars and planets aligned to rewrite dairy policy this year,” said Christopher Galen, a spokesman for the federation. The organization represents co-ops such as Dairy Farmers of America and Agri-Mark Inc., which dominate in Northern New York.

Farmers would receive payments when the difference between milk prices and the cost of feed falls below $4 for every 100 pounds of milk. Farmers could buy additional insurance for protection when margins are greater than $4.

The program would be optional, as is the current support program called the Milk Income Loss Contract. The MILC program pays farmers when milk prices fall below a federal target, with a slight adjustment for feed prices.

Mr. Galen said the NMPF has discussed the proposal with the new chairman of the House Agriculture Committee, Rep. Frank D. Lucas, R-Okla., as well as with the top Democrat, Rep. Collin C. Peterson, D-Minn. They have not necessarily promised it will be approved, Mr. Galen said, but the NMPF was pleased by the reception.

On the other side of the Capitol, Sen. Kirsten E. Gillibrand, D-N.Y., has supported programs that help farmers manage risk. After a Senate Agriculture Committee hearing last week with Agriculture Secretary Tom Vilsack, Mrs. Gillibrand submitted written questions to the USDA, asking about a margin insurance program — called the livestock gross margin dairy program — already offered that only recently has begun to attract interest.

That program, she said, is in danger of running out of money for the year.

“As you know, Mr. Secretary, dairy farmers have not had very good tools to help manage price risk in a global market. Can you assure us that dairy farmers who sign up in the next few months will get into the LGM Dairy program?” Mrs. Gillibrand wrote. “Are there other ways that we can partner together to help protect profitability margins for dairy producers?’

A spokeswoman in Mr. Vilsack’s office had no immediate information on the program Tuesday afternoon.

The dairy cooperatives’ lobbying group is dealing not only with new congressional leadership but also with big changes in the Agriculture Committee’s rank and file. The committee has 24 new members, out of a total of 45, many of whom are new to dairy policy. Education will require a heavy effort, said Robert Gray, executive director of the Council of Northeast Dairy Cooperatives.

The biggest predictor of the proposal’s success, he said, will come after it is written into legislative language and the nonpartisan Congressional Budget Office predicts its cost.

Source: Watertown Daily Times
By Marc Heller, Times Washington Correspondent