Posted: Thursday, May 03, 2012 11:00 AM
A new analysis of the dairy policy changes being considered by the House and Senate Agriculture committees finds that the reforms will have a minimal effect on milk production, dairy product exports and consumer prices.
The report analyzes the Dairy Security Act, House Resolution 3062, offered by Reps. Collin Peterson, D-Minn., and Mike Simpson, R-Idaho. It is based on a proposal by the National Milk Producers Federation.
The legislation, which includes margin insurance and supply management, is also included in the Senate's farm bill draft. Margin insurance would be voluntary but producers would be subject to supply management if they enroll in the insurance program.
The key conclusion of the FAPRI report is the dairy reforms reduce margin volatility at the farm level, without negatively affecting the supply of milk to domestic or international markets, NMPF stated.
"This new assessment should calm any concerns on Capitol Hill that the U.S. dairy industry will be in any way diminished or hobbled by the changes we want to make," said Jerry Kozak, president of NMPF.
The study states that over the period of 2012 to 2022, there are only small effects on milk availability under the proposal. Even with 70 percent of the milk supply in the program, the analysis shows that supplies average 0.1 percent less than without the program.
The impacts on exports and consumer prices also would be minimal, according to the study. The analysis shows that during the 11-year period studied, the national farm-level all-milk price would average just 5 cents per hundredweight higher.
NMPF noted the American Farm Bureau Federation and the National Council of Farmer Cooperatives have endorsed the changes in dairy policy.
The analysis was commissioned by the House Agriculture Committee and was prepared by Scott Brown, of the University of Missouri and the Food and Agriculture Policy Research Institute.