Drought Stirs More "Supply Management" Controversy

IDFA says proposed dairy legislation would have been exacerbated by drought

Published on: Jul 24, 2012

But Jerry Kozak, president and CEO of the National Milk Producers Federation, a supporter of the DMSP, says the drought is having little effect on milk production.

"Summer heat always leads to a slowdown in milk output – this year will be no different – but the USDA reported last week that milk production in the second quarter of 2012 was up 2.0% compared to 2012, while the first quarter was up a whopping 5.3%. The U.S. is well on track to produce a record volume of milk this year, a hot summer notwithstanding," Kozak said.

Kozak explained that the provisions in the Farm Bill are tied to the difference between the farmer's milk price and the cost of feed. He said those farmers that choose to participate in the proposed program would be insured against low margins, but would be expected to lower their output level to return milk price to "healthy levels."

Kozak said the drought isn't a reason to avoid the DMSP, but instead a reason why it is needed.

"These summer temperatures, and the possibility of a poor crop harvest, are exactly why we need a dairy farm safety net that takes into account higher feed prices, and also gives us a tool to better align supply and demand. Relying on the weather to perform this process is foolish," he said.

During House Agriculture Committee discussion on the Farm Bill, an amendment proposed by Representatives Bob Goodlatte, R-Va., and David Scott, D-Ga. to eliminate the DMSP was defeated with a vote of 29-17. Now, the DSMP legislation will continue to the full House of Representatives for final vote.