Proponents of both supply management and expanding global markets were challenged by Congressmen this morning in a hearing on the dairy crisis convened by the U.S. House subcommittee on Livestock, Dairy and Poultry. This is the third hearing held by the committee since July 14. www.agweb.com/DairyToday/Article.aspx
Michael Conaway (R., Tex) challenged Holstein USA spokesperson Gordie Cook to name one government run supply management program in any ag commodity that worked well over the long run. Cook responded that it could be done with the right appointments to the proposed 12-dairymen governing board. www.holsteinusa.com/association/dairyprice.html
But Conaway immediately shot back: "I respectfully disagree that any supply management program can work better than the market. They never work over the long term.”
Shortly after, Eric Massa, (D., N.Y.) questioned U.S. Dairy Export Council president Tom Suber why a 3% decline in exports (from 11% share of U.S. production to 8% this year) could have such a devastating effect on prices. Suber responded that a 3% decline represents some 6 billion lb. of milk, and all that milk must now be absorbed on the domestic, U.S. market. One longer-term solution is to open markets further, completing bilateral trade agreements with Panama, Columbia and most notably South Korea, Suber said.
Massa then retorted, in perhaps the most emotional response of the morning, that he was fiercely opposed to increasing free market agreements. "Instead Congress should be protecting the domestic interests of the United States of America,” Massa said.
"I've had it up to my I teeth with ivory tower economists who promise market recovery in 12 to 18 months,” he said, receiving applause from the gallery.
The exchanges highlighted the lack of consensus of the panel's seven presenters, including Farm Bureau, National Farmers Union, independent processors and organic dairy groups. The panel was split, 4 – 3, opposing supply management. There was even little consensus on whether dairy price support levels should be raised immediately.
House Ag Committee Chair Collin Peterson (D., Minn.) threw a few more flies into the ointment as well: 1) The House will have to come up with a way to pay for any additional support. 2) Any changes cannot require re-opening the 2008 Farm Bill. "We have to work within these constraints as well," Peterson told the committee.