Wednesday, October 17, 2018
 Dairy Product Decision Looms  


Advocates for farmers cheered when Congress approved a $350 million aid package last month for dairy producers. But a simple purchasing decision by the U.S. Department of Agriculture could determine how much help farmers actually receive.

The USDA must decide in the coming weeks how to spend the $60 million Congress set aside for government purchases of dairy products. Farm groups and dairy state lawmakers are pushing for all of that money to be spent on cheese, which would quickly boost the price farmers are paid for milk. Milk processors, looking to blunt the price increases, would like to see the government buy yogurt and other products that don't correlate as closely to milk prices.

"The purpose of the aid package was to help farmers, and the best way to do that is by purchasing and then donating cheese," said Christopher Galen, a spokesman for the National Milk Producers Federation, which wrote to Agriculture Secretary Tom Vilsack on Oct. 21 urging a cheese-only approach.

On the other side of the issue is the International Dairy Foods Association, which has urged more variety in the purchasing decisions and lobbied Congress not to dictate the product mix in the aid package, which was included in an annual spending bill for agriculture programs.

A spokeswoman for the dairy group has had "absolutely no conversation" with the USDA about the issue since the bill was enacted, despite speculation from farm groups that lobbying by processors may hold up the USDA's decision.

"We're not in there saying, 'Buy this, don't buy that,'" said the IDFA spokeswoman, Peggy Armstrong.

A spokesman for the USDA, Caleb Weaver, had no information on the matter Thursday afternoon.

Dairy economists say the biggest determinant of future milk prices is the price of cheddar cheese, as well as mozzarella and other types. That's because a processor needs as much as 10 pounds of milk to make a pound of cheese, and the government weighs wholesale cheese prices in deciding the minimum price farmers must be paid for milk each month.

That's why farm groups have firmly said they want the government to buy only cheese and donate it to food programs, taking it off domestic markets. A lobbyist for the Council of Northeast Farmer Cooperatives, Robert Gray, said Thursday that "cheese and cheese only is the number one priority" for the use of the $60 million, and that message has been communicated to Mr. Vilsack.

The International Dairy Foods Association's last formal statement on the issue, Ms. Armstrong said, was a letter to Sen. Herb Kohl, D-Wis., chairman of the Senate Agriculture Appropriations Subcommittee, in August urging lawmakers to move away from measures boosting milk prices.

Among many other ideas, the association urged lawmakers to include yogurt in the federal food program for Women, Infants and Children.

"All of the above options will either help dairy farmers directly or help them indirectly by increasing demand for the milk they produce," wrote IDFA President and Chief Executive Officer Connie Tipton. "Each is much less disruptive to the dairy industry and friendlier to consumers than artificially distorting dairy prices using the milk price support program."

At that time, she said, the IDFA worried that senators would devote more of the $350 million package to dairy product purchases. In the end, she said, the IDFA was satisfied, at least, that Congress left the USDA with discretion about which products to buy.

Last month, Agriculture Under Secretary Jim Miller told the National Milk Producers Federation at a meeting that the department aims to move by year's end on the other piece of the aid package, the $290 million in direct payments to farmers.

Source: Watertown Daily Times (NY)

Posted on Friday, November 20, 2009 (Archive on Friday, November 27, 2009)
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