Boehner puts chances of co-ops' dairy reform bill at zero

WASHINGTON, April 4, 2012 -House Speaker John Boehner, R-Ohio, has staked out a familiar position on dairy policy: he’s adamantly opposed to the leading proposal for the dairy section of a new farm bill. Although it won support from agriculture committee leaders as part of the deficit reduction exercise late last year, “the chances of [Rep. Collin] Peterson’s new supply management program becoming law, in my mind, were zero,” Boehner told a farm forum several days ago in Troy, Ohio.

U.S. dairy support is “the most convoluted program you’ve ever seen,” he said, but the National Milk Producers Federation plan that Peterson introduced “has taken this convoluted program and tried to convolute it even more.” Although tradition holds that the speaker participates in floor debate only rarely, Boehner said, “I can tell you if this provision comes in the farm bill to the floor of the House, my sorry ass will be down there to say something about it.”

The speaker has a long record of opposition to dairy price and income supports and regulation. Over the years, his position has aligned regularly with that of the International Dairy Foods Association. As vice chairman of the House Agriculture Committee a dozen years ago, he sought unsuccessfully to repeal the law that regulates milk pricing under federal milk marketing orders.

IDFA characterized the Boehner remarks as “a huge boost” for its campaign against production limitation features in Peterson’s legislation. The milk processor trade group objects to the “supply management” mechanism that would reduce farmers’ prices, in order to discourage production growth, if the margin between feed costs and milk supplies fell to unacceptable levels. Instead, IDFA proposes a margin insurance program that “could be offered, even within the limited dairy baseline, by charging a small fee for a subsidized base coverage,” the group said.

Meanwhile, another attack on Rep. Peterson’s Dairy Security Act (DSA) came last week from Grover Norquist’s Americans for Tax Reform and his anti-federal spending allies at the National Taxpayers Union and the Council for Citizens Against Government Waste.

The groups penned a letter urging Senate Ag Committee Chair Debbie Stabenow not to include “periodic government-imposed limits on milk production” in the text of what will serve as the legislative starting point for her committee’s version of a new farm bill.

They argued that Peterson’s market stabilization language amounts to a tax on dairy farmers that would compel manufacturers to follow dozens of new rules and regulations and result in artificially high milk prices for consumers.

“This new proposal will ratchet up budgetary pressures on the government’s food and nutrition programs at a time when Congress should be looking especially diligently for ways to eliminate, not exacerbate, unnecessary spending,” the coalition wrote.

The National Milk Producers Federation (NMPF) agreed that farm programs need to be revamped and made more effective, but said the groups’ other assertions were “just plain wrong.” In a letter to Agriculture Committee members on both sides of Capitol Hill, the federation suggested the tax reformers were simply acting on behalf of the International Dairy Foods Association, which represents processors and strongly opposes the DSA.

“Unlike others in our industry, dairy farmers don’t need groups like these to carry their water for them,” NMPF said. It characterized the Peterson legislation as an insurance program against hard times, “not a handout when times are good,” and noted that farmer participation in the margin insurance feature would be voluntary, making it “hardly synonymous with big government intrusion.” NMPF cited an independent study that shows the DSA would lessen retail price hikes while doing away with price supports and other government funding mechanisms – a point “overlooked” by Norquist and his cohorts, it said.

USDA announced Thursday that it will pay dairy farmers nearly 39 cents per hundredweight for milk produced in February, the first Milk Income Loss Contract outlays since April 2010. Payments are triggered when the fluid milk price in New England falls below $16.94, after adjustment for the cost of feed rations, limited to 2.985 million pounds of milk per farm per year.

Based on projected costs and prices, NMPF estimates payments will be made through August, increasing from 72 cents in March to $1.02 in May and sliding to 40 cents in August. The MILC formula changes and the payment limit drops to 2.4 million pounds in September, the final month of the fiscal year, “making a payment that month very unlikely,” NMPF says.

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Original story printed in April 4th, 2012 Agri-Pulse Newsletter.

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