A report out of the Food and Agricultural Policy Research Institute (FAPRI) at the University of Missouri shows that a federal Dairy Market Support Program (DMSP) could help keep up prices without using any tax dollars to do so.
FAPRI Associate Director and dairy & livestock analyst Scott Brown says they looked at how the National Milk Producers Federation used DMSP during the recession of 2009 to add $2 cwt to milk margins, significant when you consider most margins are around $8 cwt. The way it worked was to cut supplies, and that pushed up prices, without the government having to step in and pump any funds into it.
Brown says while it’s not part of federal dairy policy now, it certainly could be. He says that even in these budget-cutting times, DMSP would be appealing to both sides of the political aisle since it would not require any outlay of tax dollars. Brown adds the best part might be that DMSP wouldn’t be used very often.
You can hear more of my conversation with Brown in this edition of the Milking Parlor: Milking Parlor Podcast FAPRI Report on DMSP
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