Agriculture Secretary Tom Vilsack will appoint an advisory board to recommend how the government can avert further freefalls in the price dairy farmers are paid for milk, his office said.
The advisory board, whose membership has yet to be determined, could take the place of a congressionally mandated commission that was dictated by the 2008 farm bill but has yet to be appointed because of a budget-related disagreement with Congress — although the USDA did not rule out also creating the panel directed by Congress.
A panel could give the government more momentum to make significant changes in the system that sets minimum prices that dairy plants must pay farmers for milk, a long term solution that many people in the dairy industry say is necessary to smooth out the wide price swings that put farmers out of business in some years and hurt milk bottlers, cheese makers and other dairy processors in other years.
Any changes in policy, however, would be a few years away — soon enough, perhaps, for the next low cycle in milk prices but too late to save the hundreds of farmers in New York who experts say could go out of business due to this year’s price crisis.
Mr. Vilsack’s spokesman, Caleb Weaver, said the board would include “a whole cross section of people involved in the dairy industry.”
He couldn’t say when the board will be appointed or when Mr. Vilsack hopes it to finish its work.
From the USDA’s perspective, an advisory board may make more sense than the farm bill’s commission. Mr. Vilsack has freedom to set the advisory board’s composition and priorities, whereas Congress dictated the general makeup of the commission and its scope of work. He can also work around the farm bill’s requirement that a commission be appointed subject to funds being approved by Congress — something that has not happened and may not happen this year, if spending bills now moving through Congress are an indication.
The department has also stepped up government purchases of nonfat dry milk through the price support program, which takes excess dairy products off the market.
An advisory board could look at a wide range of ideas, from increasing government payments to farmers when prices fall, to simplifying the system and reducing the number of federal marketing orders that set prices around the country. Some groups have also called for measures to enhance competition among milk sellers and buyers, reversing a trend that has put most milk in the hands of just a few large companies and dairy cooperatives.
One idea that seemed to gain traction at a House Agriculture subcommittee hearing on Tuesday was reducing the number of marketing orders or possibly doing away with the idea of different prices in different regions by creating one national order.