Trio of producers endorses Dairy Security Act as 2012 Farm Bill hearings begin.
Sources: National Milk Producers Federation and Committee on Agriculture news releases
SARANAC LAKE, N.Y. – At its first field hearing of 2012, held in upstate New York today, the House Agriculture Committee heard from three dairy farmers that major reform is needed in farm policy. All three endorsed the Dairy Security Act, H.R. 3062, as the best approach to making needed changes.
Friday’s hearing was the first of four meetings across the country that the House Agriculture Committee is holding to gather input for the upcoming Farm Bill.
“Field hearings are an invaluable part of the Farm Bill process,” said Committee on Agriculture Chairman Frank Lucas. “They give us an opportunity to hear from a wide variety of producers across the country so we get diverse perspectives on farm policy. I’m grateful to the witnesses who testified today. Their input will help us craft a strong Farm Bill that serves all of American agriculture.”
Neal Rea, a member of the board of directors of National Milk Producers Federation (NMPF) and a dairy farmer from Salem, N.Y., told the panel that reforms in dairy policy “must be multi-faceted, and seek to refocus existing farm-level safety nets, create a new program to protect farmers against low margins, and establish a way to better balance dairy supply and demand.” Rea is also chairman of Agri-Mark, a farmer-owned cooperative with members in New England and New York.
Rea said that his farm, like most other dairy farms, lost significant amounts of money in 2009, due to the combination of low milk prices and high feed costs, and did not benefit much from the safety net provisions of current policy. Rather than existing current programs, such as the price support and MILC payments, Rea testified that policies need to be changed to take into consideration the cost of producing milk.
“Margins, the difference between the feed costs and the milk price, became ever so important” for farmers who endured 2009, he said. The Dairy Security Act offers farmers the opportunity to obtain margin insurance that would protect against catastrophic equity losses when margins are compressed.
This approach, developed by Rea and other members of NMPF, requires “a new way of thinking about dairy economics,” he said, noting that previously, most of the focus had been solely on milk prices but not input costs. “But if there is one lesson to be learned from 2009, it’s that change is needed,” Rea told the congressional panel.
Rea’s endorsement of the NMPF plan was echoed by Jeremy Verratti, a dairy farmer from Gasport, N.Y. He also noted that “margin insurance, promoted and partially subsidized by the federal government, would be very helpful in weathering the bumps in the road that disrupt normal market pricing.”
Verratti said that in some years, such as 2009, “these bumps are more like a boulder in the field you’re plowing, a small seismic shake, or even a widespread earthquake that threatens the foundation of an entire industry. As a young dairy producer, I will never forget the financial hardship of 2009.”
The third dairy farmer to offer his perspective to the committee was Eric Ooms, whose family owns a farm in Kinderhook, N.Y., and who was testifying on behalf of the New York Farm Bureau Federation.
“Farm Bureau supports the Dairy Security Act because the supply management component of this proposal is voluntary,” Ooms said, in reference to the bill’s market stabilization provision. “If an individual producer chooses to limit production and the federal government wants to incentivize this, that is the producer’s decision and we support that,” Ooms said.
The three remaining field hearings will be held:
Friday, March 23, 2012 – 9 a.m. CDT
Carl Sandburg College, Student Center Building B
2400 Tom L. Wilson Blvd.
Galesburg IL 61401
Friday, March 30, 2012 – 9 a.m. CDT
Riceland Hall, Fowler Center
Arkansas State University
201 Olympic Drive
State University AR 72467
Friday, April 20, 2012 – 9 a.m. CDT
Magouirk Conference Center
4100 W. Comanche
Dodge City KS 67801
Learn more on the Committee on Agriculture’s website .