National Milk’s Mulhern a Farm Bill Optimist
Oct 02, 2013
Jim Mulhern, who takes over the reins as the National Milk Producers Federation (NMPF) chief operating officer Jan. 1, spent an hour with me yesterday discussing the farm bill and sundry other dairy issues. You can find a two-minute summary of that conversation here.
Mulhern, ever the optimist, thinks Congress will get its act together and pass a farm bill before the end of the year.
Much depends on who the House of Representatives appoints to the House/Senate Conference Committee, which will hammer out differences between the two versions of the bill. The biggest hurdle, of course, is funding the Supplemental Nutrition Assistance Program (SNAP), aka food stamps. The Senate voted to cut $4 billion; the House, $40 million.
But dairy policy is no minor issue. The Senate version contains NMPF’s Dairy Security Act, which includes both margin insurance and a market stabilization program. It would require participants to cut production two to six percent, depending on the level of milk:feed margin deterioration. The House version contains the margin insurance program at slightly higher premium rates but with no market stabilization program.
Mulhern calls the House version a "Trojan Horse" because he believes it could cost taxpayers billions. He likens it to the dairy price support program of the 1980s, which was linked to parity with semi-annual price support increases and no supply controls. That $13.10/cwt support price, adjusted for inflation, would equate to something like a $30/cwt milk price today.
Back in the ‘80s, that level of support resulted in huge surpluses, cost taxpayers up to $2 billion per year in government dairy purchases, and led to a string of dairy policy changes whose legacy we’re still dealing with.
Mulhern also says the allegation that a market stabilization program would lead to substantially higher milk prices for consumers is "a big lie." Those making that argument "were pulling out numbers selectively" to make their case, he says. But the strategy was effective in the House vote as representative after representative chided the bill for increasing retail milk prices.
New dairy policy, and the farm bill itself, will hinge on who gets appointed to the House/Senate Conference committee. If the conference is primarily House and Senate agriculture committee members, Mulhern is confident market stabilization would be in the final bill because it passed both of the those committees. But if Speaker of the House John Boehner appoints House conferees from Republican leadership, the dynamic could change.
Boehner himself vowed that the market stabilization program would not be part of the House version. And he likely is as adamant it not be in the final conferenced bill. Remember, too, that market stabilization failed by more than a 2:1 version in the House vote.
In earlier conversations I’ve had with milk processor lobbyists, they are confident that because of Boehner’s opposition and the overwhelmingly vote in the House, market stabilization is on its last hours of life support. Though not dead, it would take heroic efforts to bring it back to consciousness.
It’s going to be interesting to see who is right.