15 July 2009

3 minute read

Europe

In testimony submitted for the record Johnson said that while no single action by either Congress or the administration will immediately resolve today’s crisis, a suite of options does exist to ensure producers will survive one of the most devastating economic periods.

“NFU has long supported a comprehensive dairy policy that accounts for dairy profitability, income stabilization, limitation on imports, competitive markets and supply-inventory management,” Johnson said.

The House Agriculture Committee today held a hearing to review economic conditions facing the dairy industry. Chairman Collin Peterson, D-Minn., said today’s hearing was the first in a series the committee plans to hold to examine the dairy crisis. Johnson commended Peterson and the committee for their willingness to further examine the situation.

“Farmers Union’s dairy farmer members are prepared to engage in immediate conversations with members of the committee to help resolve the current situation and ensure it is not repeated in the future,” Johnson said.

Specifically, Johnson laid out the following short and long term actions:

SHORT TERM OPTIONS:

• Establish safety net support price that is fair and equitable to all producers – Establish an emergency Class III floor price of $18/cwt by existing authorities of the Secretary for a period of 6-9 months. During this period, USDA should launch the FMMO review as established in 2008 Farm Bill. Additionally, we support efforts to launch an investigation at the CFTC into potential manipulation at the CME;
  
• Continue counter-cyclical MILC safety net – Approve Sen. Gillibrand’s legislation to double MILC payment rate (S. 1398);
  
• Eliminate make allowance. If not eliminated, make it variable and tied to producers’ cost of production;
  
• Require the NASS survey to be audited periodically;
  
• Maintain standards of identity on dairy products and move to increase fat content standards in fluid milk;
  
• Deploy low-interest and emergency loans, including a foreclosure mitigation program to stem the tide of loan foreclosures;
  
• Product purchase for donations to food banks and other nutrition programs;
  
• Allow producers to label milk as free of artificial growth hormones;
  
• Accurate recording and publishing of import data from ERS; and
  
• Ensure imported dairy protein blended products are accounted for and categorized appropriately according to the common or commercial meaning of the term “milk protein concentrate”, not allowed to disguise skim milk powder MPC to avoid tariffs and the tariff rate quota.

LONG TERM OPTIONS:

• Efficient transmission of price signals should be established. Today’s market is non-functioning with imbalance of buyers/sellers;
• Pass the Milk Import Tariff Equity Act to address unlimited imports flooding U.S. domestic market.
• Include CA and all regions/areas in the FMMO;
• Correct pooling/de-pooling provisions in the FMMO;
• Eliminate bloc voting;
• Allow “no” vote on amendments, yet maintain FMMO;
• Do not place financial burden of transportation onto producers;
• Establish three-part pricing formula to include: cost of production, Consumer Price Index and Chicago Mercantile Exchange;
• Resolve distribution and supply management challenges;
• Repeal forward contracting authority;
• Support funding for academic antitrust research;
• Intensify review process for proposed dairy mergers;
• Promote smaller coops and increase oversight of coop management to ensure interests of producers are met;
• Passage of S. 889; and
• Eliminate authority for dairy import promotion assessments.

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