Senate Agriculture Committee members this week heard directly from dairy producers, industry groups and processors about what can be done to address the current economic crisis in the dairy industry. Proposed short and long term solutions ranged from the government buying more cheese to complete restructuring of U.S. dairy policy.

Eric Ooms, a producer from New York, told the panel that while there is industry support for a national pricing solution, producers in his area are against eliminating differentials. “ANY plans that recommend eliminating or lowering the Class 1 differentials should be viewed very skeptically, if not outrightly opposed,” Ooms said emphatically. “With growing emphasis on the importance of regional food systems and local foods, it seems obvious to me that to steer federal policy away from Class 1 differentials is counterproductive.”

Producer Paul Toft from Wisconsin, testifying on behalf of the Associated Milk Producers Inc. (AMPI), noted the importance of maintaining the Milk Income Loss Contract (MILC) and the Dairy Product Price Support Program. “Unfortunately, the MILC program by itself is not sufficient,” Toft said. “The price dairy farmers are receiving for their milk is still below the cost of production. They have been losing thousands of dollars a month, even with the MILC program assistance.” He says that AMPI is supporting the concept of dairy price
stabilization.

Ray Souza of California, president of Western United Dairymen, said the situation for family dairy farmers in his state is dire. For the short term, Souza says WUD recommends USDA buy more cheese to donate to food banks. “I come from an area where some counties have 15% to 16% unemployment. The food banks there sure could use that cheese,” he said. Long term, he says WUD endorses the supply management proposal known as the Holstein Association Dairy Price Stabilization Plan.

Doug Nuttelman, a dairy farmer from Nebraska, says the the current economic situation has “redefined dairying.” As a member of the National Milk Producers Federation (NMPF) board of directors, Nuttleman presented a plan that would involve a new approach to dairy policy, including revamping of the federal Milk Marketing Order program and discontinuing the Dairy Product Price Support Program, as well as instituting a dairy insurance program. “As a farmer, I participate in my crop insurance program,” he told the panel. “I’d like to see some type of margin-type program for my dairy.”

Read the testimony of all the panelists at this week’s hearing and watch a video of the proceedings here on the Senate Ag Committee website.