By the time you read this, the recommendations of USDA’s Dairy Industry Advisory Committee (DIAC) will likely be on their way to Secretary of Agriculture Tom Vilsack. As I write this, those recommendations are still being tweaked. Yet the 154-page draft report is a fascinating read. It is a primer on dairy policy and regulation, and it proves beyond doubt that "fixing" dairy policy is neither simple nor easy.
Perhaps most illustrative is Recommendation 17, which urges the study of adopting California solids standards nationwide. Yes, milk prices would jump 27¢ per cwt. in the first year. But, the report notes: "Those price increases would then slip to 17¢ in the second year and narrow to 9¢ by the seventh year…as farmers increase milk production."
The price benefits would also be regional, with California producers seeing higher prices and Midwest producers "actually seeing milk price decreases over time." Retail milk prices would jump 17¢ per gallon or more, leading to a drop in milk consumption. In addition, more milk solids forced into fluid milk could reduce our ability to supply export markets and even encourage more imports.
The DIAC’s biggest strength—its 17 diverse members—is also its biggest weakness. Some had little background in dairy policy and regulation, so their colleagues had to educate them about why issues such as adopting California solids standards nationwide are no slam dunk.
In the end, DIAC will have produced a balanced document, and it should be commended for the hundreds of hours it donated to the cause. But what will Secretary Vilsack do with the report? Study this, explore that?
If Secretary Vilsack is expecting simple answers, he should know better. The issues facing the dairy industry are tough, complex and usually zero-sum, with real winners and real losers. That’s why change is so difficult.
The National Milk Producers Federation and International Dairy Foods Association are where the deep expertise and real power lies. They will argue, fight and maybe compromise over which changes can actually occur. End of story.
- February 2011