California’s Milk Producers Council said today it is outraged by comments made June 16 by Connie Tipton, president and CEO of International Dairy Foods Association (IDFA) in which she voiced opposition to a supply management program for dairy producers.
During Tuesday's opening remarks at IDFA’s Washington Conference, Tipton criticized recent proposals that would create a government-mandated system to limit the supply of milk produced by dairies.
"I'm not going to mince words," Tipton told more than 80 dairy company leaders. "Supply management will destroy our dairy industry's opportunity for the future."
A supply management proposal was recently introduced in the House of Representatives. A similar proposal was included as part of a dairy policy reform plan released last week by the National Milk Producers Federation.
The idea behind a supply, or growth, management plan is to bring U.S. milk production into balance with demand. The Dairy Price Stabilization Act of 2010 introduced in the House of Representatives in May would be a national program aimed at giving individual dairies a financial incentive to manage their milk production. Supporters believe the incentive would enable the dairy industry to better align national supply and demand, avoiding the extreme booms and busts in milk prices.
But IDFA doesn’t see it that way. In her speech, Tipton said government-mandated supply-management programs, intended to reduce price volatility for dairy farmers, will only add more complexity to the system and will decrease demand for dairy products and dairy ingredients by encouraging non-dairy substitutions in foods and restaurants across the country.
Tipton’s comments, “coming from a representative of our nation’s processors . . . should anger every dairy farmer across the country,” said Rob Vandenheuvel, general manager of Milk Producers Council. “As an industry, dairy farmers have gone to great lengths to provide our processors with opportunities to profitably operate. With virtually guaranteed profit margins in the form of ‘make allowances’ and a government price support program that guarantees a buyer for some of their products even when dairy markets collapse, processors have been largely insulated from market risk.”
Vandenheuvel added: “So why would IDFA, representing many of these processors whom dairy farmers have protected for so many decades and continue to protect, be so strongly opposing efforts to maintain better balance between the production of milk by our farmers and the demand for that milk? It’s simple: these processors want to control the supply of milk and ultimately control the dairy farmers.”
Tipton said dairy processors are sensitive to the market situation for farmers. “We are well aware that dairy producers are coming out of a period of devastating margins," she said. "But we need a solution that offers support and opportunity."
Tipton also said that supply management would stop U.S. dairy exports at a time when emerging markets “are crying out for more dairy products."
Milk Producers Council supports H.R. 5288, the Dairy Price Stabilization Act of 2010, which was introduced in the House of Representatives on May 12, 2010 by California congressman Jim Costa.
IDFA, based in Washington, D.C., represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies.
been a leading proponent of supply management, particularly the Dairy Price Stabilization Program first proposed by Holstein Association USA.
Milk Producers Council represents California dairy families.