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Dairy Farmers Speak Out against Supply Management

October 5, 2012

They support the Goodlatte-Scott amendment, saying it provides insurance without government interference in free markets.

Dairy farmers from several states spoke out at World Dairy Expo about the dangers of a dairy supply management program included in the Dairy Security Act.

They voiced support for the Goodlatte-Scott amendment, an alternative proposal they said provides insurance without government interference in free markets.

"Supply management is fundamentally flawed," said LuAnn Troxel, who with her husband milks 130 cows and operates a large animal veterinary practice in northwest Indiana.

"No other commodity groups are being asked to reduce supply," Troxel said. "I don’t want to be the guinea pig for supply management."

Supply management will bring unintended consequences, Troxel added. "It will be negative for exports, which are the answer to those of us who want to increase our production. Also, we’d rather have experts find ways to move our dairy products to the world market."

Also speaking out against supply management were Wisconsin dairy producers John Pagel, Jerry Meissner, Gordon Speirs and Randy Hallet. They were joined by: Mitch Davis, who manages Davisco Foods and operates a 6,500-cow dairy; Maury Cox of the Kentucky Dairy Development Council; and dairy producer Howard Straub of St. Johns, Mich.

The Dairy Security Act is part of the farm bill version passed by the Senate and next up for floor debate and amendments by the House of Representatives. The controversial provision in the Dairy Security Act is known as the Dairy Market Stabilization Program (DMSP). If dairy farmers want to participate in a margin, or risk insurance program, they would have to agree to participate in the DMSP. Under the DMSP, would either have to limit milk production or forfeit a portion of their milk checks when margins fell below $4/cwt.

Farmers are beginning to learn the potential impacts of the program, producers said today. If the program becomes law, dairy farmers would either have had to decrease production beginning back in May, or pay a penalty.

"That deduction, at 8% or even at 4%, has a huge impact on our bottom line," said Pagel of Pagel’s Ponderosa Dairy in Kewaunee, Wis. "That 8% can pay a lot of bills or cover my interest at the bank."

Speirs is a third-generation dairyman who owns and operates Shiloh Dairy LLC with his wife, Cathy, and sons Travis and Tyler. The Speirs family moved its operations from Alberta, Canada to Brillion, Wis. in 2003. Shiloh Dairy is a 1,500-cow dairy and is in the process of expanding to 2,100 cows over the next two years.

"I am opposed to supply management because once regulations are in place and found to be not working, the government will do its best to try to fix it with more regulations," said Speirs. "This was my experience in Canada with the quota system and I expect it will not be different here."

"Dairy farmers in Wisconsin could have been penalized up to $18,000 had this program been in effect now," noted Jerry Meissner, president of the board of directors for the Wisconsin Dairy Business Association, and owner of Norm-E-Lane, Inc., a 2,000-cow operation near Chili, Wis. "This is bad news for Wisconsin."

Wisconsin’s Dairy Business Association (DBA) presented a table that outlines potential impacts of the stabilization program on Wisconsin, as the program would have triggered earlier this year, and still been in effect.

DBA chart 10 4 12

(Source: Wisconsin DBA)

A bipartisan compromise amendment proposed by Reps. Bob Goodlatte (R-Va.) and David Scott (D-Ga.) would remove the stabilization provision, and also would provide dairy farmers with the ability to obtain margin insurance, with catastrophic coverage, as a risk management tool for times of low milk prices and high feed costs. The amendment is expected to be offered and voted upon when the full House considers the farm bill, possibly in the lame duck session that will begin in November.

Dairy producer organizations opposed to the  supply management proposal include:

  • California Dairies, Inc.
  • Dairy Business Milk Marketing Cooperative
  • Dairy Policy Action Coalition
  • National All-Jersey, Inc.
  • North East Dairy Producers Association, Inc.
  • Wisconsin Dairy Business Association
  • Minnesota Milk Producers
  • Alliance Dairies (Florida)
  • Board of Directors of Bongards’ Creameries (Minnesota)
  • First District Association (Minnesota)
  • High Desert Milk (Idaho)


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RELATED TOPICS: Dairy, Policy, World Dairy Expo

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COMMENTS (7 Comments)

cow land - SHERBURNE, NY
Any farmer who wants supply management dose not understand economics. If we all produced less more imports would flood in. Supply management without tight import controls would destroy dairy. We are already exporting some of our best genetics it is only a matter of time before this comes back to haunt us. Do you really think china will not continue to grow their own supply? cheep labor and less regulations will allow them to have an advantage not to mention there proximity to markets compared to most of the US.
5:50 PM Oct 13th
farmerjulia - NY
Any dairy farmer against supply management doesn't understand economics. When will farmers understand that if we all produced half as much milk, we would make TWICE as much money.
4:52 PM Oct 11th
cow land - SHERBURNE, NY
kind of like crop insurance. get rid of it too then.
6:15 AM Oct 6th
Smallest Dairy Farmer
Lets be honest here now. Dairy farmers are not subsidized by the government nor does the government mandate that milk be purchased. Let all be free market. Ethanol should go ahead & go the free market completely subsidy, no mandate. If the price goes down, the plants are on their own. We can do that if you can. Lets get business on a level playing field. I would be happy to compete that way. Get government of crop insurance as well. Let private insurance take a shot at it.
5:41 PM Oct 5th
If these dairymen truly want a free market and don't want the supply management program, then they shouldn't have the option of the gov risk insurance program. They can go it alone without the gov support.​
10:25 AM Oct 5th
Drake78 - Cherokee, IA
The dairymen don't want supply management, yet they want to place limits on the ethanol industry, their corn supply competitors. They should feel free to bypass margin insurance if it doesn't work for their operation.
8:57 AM Oct 5th
Drake78 - Cherokee, IA
The dairymen don't want supply management, yet they want to place limits on the ethanol industry, their corn supply competitors. They should feel free to bypass margin insurance if it doesn't work for their operation.
8:57 AM Oct 5th



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