California dairy group calls on Congress for immediate action on dairy crisis

January 18, 2009 06:00 PM
 

California's Western United Dairymen (WUD) has called on the state's congressional delegation to take immediate action on the trade group's proposal for emergency realignment of U.S. milk supply and demand. The proposal was adopted at WUD's board meeting January 16.

 

The proposal calls for additional funds for the herd retirement program already in place through the Cooperatives Working Together (CWT) program. CWT funds could be leveraged by either a loan guarantee or matching funds offered by the federal government, WUD said in its Jan. 18 Weekly Update. The group estimated that the additional funds could be used for the immediate removal of approximately 300,000 milk cows.

 

The proposal recognizes "that domestic and global demand for U.S. dairy products has drastically declined in the midst of the current economic crisis." Noting the sizeable capital investments in dairy facilities, contracted inputs and the inability to "turn off a cow,” WUD noted that dairy farmers are faced with few options but to follow their individual business models and predetermined production levels despite the milk price they receive.

 

"We hope other national dairy groups will support this effort to bring immediate, near-term relief to dairy producers who are faced with an economic crisis that is more severe than we have ever seen,” WUD President Ray Souza said. "California dairy families need action by Congress in weeks, not years.”

 

The herd retirement, if done immediately, would avoid large numbers of dairy cows being sent to market in the spring, when most beef cattle producers bring their animals to market. WUD also cautioned that inaction in addressing the current dairy situation may lead to a major failure in the Farm Credit System as equities and cash flow decline daily.

 

The proposal comes on the heels of WUD's recent call for USDA to fully implement the Dairy Export Incentive Program (DEIP). This program provides bonuses for limited quantities of cheese, nonfat dry milk (NFDM), and butter fat to assist in their export.

 

Catherine Merlo is Western editor for Dairy Today. You can reach her at cmerlo@farmjournal.com.

 

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