Dairy Organizations Push For Supply Management Policy
04/20/12 7:04AM By Jane Lindholm
Lawmakers in Washington are hearing from representatives of the dairy industry about what they hope will be in the next federal Farm Bill, which is likely to be debated this summer. More than 2 dozen dairy organizations are pushing for the inclusion of a supply management policy called the Dairy Security Act.
Bob Wellington handles economics and legislative issues for Agri-Mark, a dairy cooperative of farmers in New England and New York which owns Cabot Cheese.
"When the price of milk falls, cows still eat the same amount of feed. And they use the same amount of electricity and diesel fuel and all the other costs," Wellington said. "So the only thing that farmers can do is actually increase milk production to keep up their total revenue to try to pay their bills. And when that happens, it aggravates the supply and demand problem and makes it worse. So it's a terrible downward cycle when it occurs. And it only stops when farmers go out of business and that's what we want to avoid happening."
Wellington says the Dairy Security Act would offer incentives in the form of insurance for farmers to lower their production when there's an oversupply of milk to try to rebalance the market and stabilize prices.