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Agriculture requires a great
deal of planning and capital to observe its cycle, this ongoing
effort serves to increase productivity, improve efficiency, and
offer the U.S. consumer an array of quality food products, all
for a price of less than anywhere else in the world. While the
influence of weather will either increase productivity, or
deliver an impact, it is recognized as being well beyond our
control. In addition to weather, farmers rely on favorable
policy, on seeing an improved Farm Bill every five years, and
since that doctrine establishes the rule under which we operate,
it is something of great importance to us, all of us.
The Dairy Security Act, as
proposed, offers the dairy farmer a management tool which
responds to market demand, the normal function of any market is
to either expand or contract. Currently, the farmer has no
meaningful response to a receding market, but must maintain cash
flow to avoid becoming insolvent, as price deteriorates more
milk is produced for what is then an already saturated market.
A supply / demand approach to achieve market balance
would reduce price volatility, improve the use of farm assets,
and offer the taxpayer a reduced expense.
International Dairy Foods
Association (IDFA), however, has long worked to encourage market
oversupply, milk is the chief input cost for processors, and
oversupplied markets ensure distressed pricing. During 2009,
dairy farmers converted $16 Billion worth of equity to loans,
yet national policy offered the farmer no tool for response as
markets receded, an expensive oversight to say the least.
The support price for milk
remains at $9.90 per hundredweight(cwt), about half its cost to
produce. During the early 1980's the federal price support had
reached a high of $13.30 per cwt, but due to excessive market
oversupply, Congress and the Reagan Administration allowed it to
recede to its current level, $9.90 per cwt. The market sees
dramatic price swings, yet we fail to address the farmers need.
1970 recorded 648,000 dairy
farms operating in the U.S., today, 49,000 remain, last year we
produced just over 200 Billion lbs. Of milk, 50.3% of it was
produced by 2.9% of those farms.
I expect that Representatives
Goodlatte, Va., and Scott, Ga., will introduce an amendment to
remove an essential tool from the Dairy Security Act, no doubt
promoted by IDFA, which leaves a safety net to stand alone, a
maneuver that would unleash milk production at the taxpayers
expense. Our history speaks for itself, lets not revisit a
failed policy terminated by Congress, and the President, in
Thank you for your consideration of the
dairy farmer, and taxpayer.