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IDFA Says 'Foundation For the Future' Hurts Exports, Jobs

May 25, 2011
By: Jim Dickrell, Dairy Today Editor

Dairy exports and jobs needed to produce those exports would both decline under the National Milk Producer Federation’s Foundation for the Future plan, says Bob Yonkers, chief economist for the International Dairy Foods Association. 

“Existing research clearly shows that policies that attempt to manage volatility would limit industry growth and reduce U.S. dairy exports at a cost of thousands of U.S. jobs,” says Yonkers.
Pointing to analysis done by the Food and Agricultural Policy Research Institute, Yonkers says U.S. exports would have declined in March, April and May of 2009. Non-fat dry milk exports would have dropped 38%, butter exports by 16% and American cheese exports by 8%. (Note, however, that exports would have recovered later in the year, though all the commodities would still have been negative for the year: powder, -10%; butter, -3.8% and cheese, -4.1%.)
Yonkers also cites a USDA study that suggests that for every $1 billion increase in agricultural exports, 8,400 new jobs are created. In 2009, the loss of $300 million in dairy exports would have meant the  loss of some 2,000 jobs.
Yonkers says program that curtail domestic production to reduce volatility can actually increase it globally. That’s because cutbacks in production in the United States means fewer exports, greater world demand and greater price spikes.
Risk management tools, rather than production controls, are preferable means of managing volatility. “IDFA concludes that dairy policies designed to help farms and firms manage milk price volatility are preferable to policies that attempt to insulate the United States from global dairy price fluctuations,” he says.
Yonker's complete report can be viewed here.

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