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On The Farm
May 18,2013
Dear Senator,
I am a dairy farmer anxious to
see a new Farm Bill, one which offers the potential, through its
tools and policy, to improve conditions for the dairy farmer.
1970 recorded 648,000 dairy farms in this country, today 49,000
remain, though fewer in number we produce a burgeoning supply of
milk, which at times over supplies the market. Our need is to
better utilize farm assets, rather than infrequently, but
nonetheless, supply the market below our cost to produce milk,
and then require government help. The question of need is
evidenced by declining farm numbers, and therefore, we request
your help to implement an improved dairy policy in the new Farm
Bill.
The Dairy Security Act, as
proposed, offers the dairy farmer a management tool which
responds to market demand, the normal function of a market is to
either expand or contract, and currently the farmer has no
meaningful response to a receding market, but must maintain cash
flow to avoid becoming insolvent. When price begins to erode,
more milk is produced for what has then become 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 dairy 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 means of responding to
those receding markets, an expensive oversight.
The support price for milk
today remains at $9.90 per hundredweight (cwt), about half its
cost to produce. During the early 1980's the federal price
support reached a high of $13.40 per cwt, but due to
excessive market oversupply, Congress and the Reagan
Administration allowed it to recede to its current level of
$9.90 per cwt.
Recently, The House Ag
Committee defeated an amendment introduced by Representatives
Goodlatte, Va., and Scott, Ga., which would have removed an
essential tool from the Dairy Security Act, a maneuver which
would have left the taxpayer funded / farmer funded safety net
standing alone, such an amendment would create an endless supply
of cheap milk for the processor, but at great expense to others;
I would kindly ask you to keep that in mind if such an amendment
comes to be reintroduced. Our history speaks for itself, but
without farmers in the equation there is no dairy industry, lets
not revisit policy terminated by Congress, and The President,
back during 1981.
Thank you
for your consideration of the dairy farmer, and taxpayer.
Respectfully,
Bill
Rowell
Dairy Farmer, Vt.
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