Supply Management Will Increase Prices, Decrease Exports
US - "The Dairy Market Stabilization Program is bad policy," said Laurie Fischer, executive director of the Wisconsin Dairy Business Association in her DairyLine broadcast to producers at World Dairy Expo.
4 October 2012
2 minute read
"It is exciting to be here at the World Dairy Expo, with so many colleagues who are passionate and committed to our growing industry.
"In Wisconsin, dairy producers have been challenged to increase production to 30 billion pounds by the year 2020. In New York, Governor Cuomo is working to help the booming Greek yogurt industry by loosening regulations and increasing incentives for dairy farmers.
"Which is what makes it so frustrating that, at the same time, Congress is adding new regulations and disincentivizing farmers with a supply management scheme.
"The Dairy Market Stabilization Program is bad policy. Dairy farmers want a safety net in the form of margin insurance. But in order to get it, they have to participate in a program that forces them to periodically limit milk production or be penalized if they do not. Dairy farming is not that nimble—you cannot turn a cow on and off at the drop of a hat!
"If the stabilization program was in effect now, it would have triggered earlier this year, and some of my members' dairy farms in Wisconsin would have been penalized up to $18,000!
"The purpose of the stabilization program is to increase the price of milk, which will increase the price of dairy products. Consumers will look for alternative products to purchase at lower prices, and our export purchasers will turn to other countries, shutting the United States out as the world’s supplier of dairy products. This is very dangerous territory for Wisconsin dairy producers.
"An alternative will be offered in the House by Representatives Bob Goodlatte of Virginia and David Scott of Georgia. It will remove supply management and provide dairy farmers with margin insurance, a tool for when milk prices are low and feed costs are high as they are now.
"Whether dairy farmers believe in free markets, or want to expand their dairy businesses or protect their business for their children, or if they are part of the growing export market, or adding jobs and revenue to the local economy, they should reject supply management and support the Goodlatte-Scott alternative."
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