Wisconsin Dairy Group Opposes Dairy Market Stabilization Program

01:47AM Nov 04, 2011
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Group says net farm incomes will decline for all sizes of farms, declines to accept NMPF’s recommendation.

The Wisconsin Dairy Business Association and its executive director Laurie Fischer released this news release in response to the National Milk Producers Federation press release of Nov. 1, 2011:
“About 20 Wisconsin producers met with Dr. Mark Stephenson, Director of Dairy Policy Analysis at the University of Wisconsin-Madison on Oct. 20, 2011, at the request of the Wisconsin Dairy Business Association (DBA).
Stephenson presented the results of his latest study, an analysis of the revised version of the Dairy Market Stabilization Program.  
Stephenson's modeling showed that there would be a milk price reduction of $.80 to $1.63 per cwt. for all size farms with only moderate milk price volatility improvement. Stephenson and colleague Dr. Chuck Professor Nicholson at California Polytechnic State University created this systems dynamic economic model of U.S. dairy industry several years ago.
This model has been used to examine multiple dairy policy concepts in recent years. The modeling analysis concludes that small farms will leave the dairy industry at a faster pace. I had an email correspondence with Dr. Stephenson following his presentation to confirm and clarify elements of his presentation.
This is what was presented to us by the study's author. We are not manipulating, extrapolating or twisting his words into pretzels. Dr. Stephenson's presentation convinced us to oppose the Dairy Market Stabilization Program even more vociferously than we had been doing before.
The Stephenson/Nicholson report is the only available academic analysis of the Dairy Market Stabilization Act available and its key finding from our perspective is that net farm incomes will decline for all sizes of farms. At a minimum, this result should cause organizations to question the "pass-the-bill and ask questions later" approach to this legislation that is being demanded by the National Milk Producers Federation.
Stephenson and Professor Nicholson enjoy an excellent reputation as fair and respected agriculture economists. Their reports have been cited by the National Milk Producers Federation and can be found on their website."