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Time to reform milk pricing rules

By Nate Wilson
January 22, 2014

[Editor’s note: This open letter, calling for real reform of the current USDA milk pricing formula, was sent to Sen. Debbie Stabenow (D-MI), chairwoman of the U.S. Senate’s Agriculture Committee, with a copy to The River Reporter.]

Dear Senator Stabenow,

Given the current reported impasse in the negotiations of the 2014 Farm Bill, my colleagues and I thought we might pose a suggestion to the leadership of both the U.S. House and Senate agriculture bill conferees that might facilitate “dynamiting” the key log in this jam. Our impression is that the key log is the proposed dairy policy of the 2014 Farm Bill.

Here is our suggestion: Agree on an extension of the current dairy policy of the 2008 Farm Bill for a period of two years. Take the time gained to conduct wide ranging, all inclusive House and Senate dairy policy hearings aimed at the formulation of an entirely new, comprehensive, from the foundation up, national dairy policy. Current policy is still based on an archaic statute enacted in 1937: it is beyond high-time that this unworkable policy be scrapped and an entirely new policy created to reflect 21st century realities.

We suggest that in such proposed hearings, all aspects of the dairy industry be on the table, that all interested parties be heard, that every effort be made to formulate a new national dairy policy that is fair and equitable for all, from cow to consumer. Key would be a new USDA milk price formula that replaces the corrupt and often manipulated current formula. Needed is a policy that consistently returns U.S. dairy farmers’ legitimate, regionally tabulated, production costs. Such a formula would do away with the current abomination of damaging, chaotic farm milk price swings and relieve the U.S. taxpayer from having to fund a price safety-net for U.S. milk producers.

We understand that current negotiations are stalled on the supply management portion of the proposed Dairy Security Act. The Dairy Security Act is seriously flawed policy that has the potential to become a taxpayer-funded, runaway financial train if it is enacted without its supply management component to govern potential milk over-production.