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A Producers Perspective   

  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 1981.

Thank you for your consideration of the dairy farmer, and taxpayer.

Respectfully,

Bill Rowell

Dairy Farmer, Vt.