Guest Editorial by Arden Tewksbury, Manager, Pro Ag

IN YOUR HEART

YOU KNOW THE “SPECTER-CASEY BILL” IS THE ANSWER

While different proposals are being floated around to solve the dairy farmers’ financial crisis, different elements (including a national survey) clearly indicate that the average size dairy farmers, along with thousands of consumers, clearly support “The Federal Milk Marketing Improvement Act of 2009,” commonly called the “Specter-Casey Bill,” (S-1645).

We are now receiving calls from Congressmen’s Agriculture Aides from whom we have never heard before. They express major concerns with other proposals, especially the National Milk Producers Federation (NMPF) plan identified as “The Foundation for the Future.”

Very clearly, the dairy farmers we talk to do not want any form of “insurance” programs to cover the shortfall below their needed income. Many of these producers wonder if NMPF’s plan really does eliminate the troublesome “make allowances.”

To us and many others, the make allowances, in fact, will be contained in the competitive pricing mechanism proposal being promoted by NMPF. What this means is that the dairy farmers’ prices will be adversely affected by the competitive pricing system which will lower raw milk prices paid to dairy farmers to a level that accommodates the make allowances.

Some Congressmen’s aides say many of the legislators like the Specter-Casey Bill, but it appears the Senate and House Agriculture Committees listen only to NMPF. If this is true, then dairy farmers must accelerate their efforts in talking to both of these Committees.

The biggest misunderstanding about the Specter-Casey Bill still appears to be the milk supply management provision included in S-1645.

Even some newspaper reporters are calling to tell me that different people in the “industry” are calling them to find out if S-1645 prohibits dairy farmers’ production.

The real philosophy in S-1645 on milk supply is the following: Dairy farmers are not prohibited on the amount of milk they produce, but there has to be a market for their milk.

Please remember that the supply management provision of S-1645 can not be implemented if imports of dairy products exceed exports of dairy products. In other words, American dairy farmers are not going to subsidize imported dairy products.

Also, we have never had a real national supply management program as a comparison (except ridiculous, low milk prices).

In a nutshell, S-1645’s supply management  has two phases that would work like this: Under the first phase, if the USDA’s Secretary of Agriculture (regardless who it is) determines that there would be over-production of milk in 2011, for example, then he could reduce the value of every dairy farmer’s milk on up to 5% of every producer’s production. This reduction would be one half (1/2) of the value of manufactured milk (Class II). For example, if the class II milk was $20.00 per cwt, then the reduction would be $10.00 per cwt on up to 5% of the farm’s milk production.

Supposing that the Secretary kept the 5% on for one year, (which I think he should consider), this would result in 850 million dollars to build a fund for the Secretary to buy dairy products to provide for the needy (and we know there are many needy people who could benefit from this provision).

What dairy farmers must remember is that they will receive the right price on the other 95% of their milk. Who knows, maybe the Secretary might not feel the need to implement the program at all.

However, under the provisions of the second phase of the Specter-Casey Bill’s supply management proposal, if the Secretary feels there is too much milk going to be produced, he can then put an additional penalty on any producer who produced more milk than the previous year. The Secretary would have full authority to establish a value on this extra milk. Maybe the penalty will be $15.00 per cwt. This would generate an additional 150 million dollars for the supply management fund. These dollars would be added to the original 850 million dollars that would already be in the fund from the first phase of the supply management.

Please remember! If the Secretary implements the second phase and if you have not produced more milk than you produced the previous year, you will not be charged anything under this phase of the supply management provision of the Specter-Casey Bill.

The supply management provision of the Specter-Casey Bill is geared to definitely ensure that the dairy farmers receive the right price on at least 95% of their milk.

Also, it is noteworthy to remember that Congress and the USDA will still be responsible for the WIC program, the school lunch program, the needs of the military, and any other feeding programs mandated by law.

In conclusion, a review of the latest revised milk production figures compiled by USDA substantiates very clearly the need for a supply management program for dairy farmers but only if a new pricing formula is developed that will consider the dairy farmers’ cost of production. Additionally, of course, the problem with unbridled, rampant dairy imports must be addressed before American dairy farmers should be subjected to any supply management programs that curtail domestic milk production.  Our nation’s food security needs demand protection of our domestic milk production.

This is a brief overview of some of the provisions contained in the Specter-Casey Bill.

Pro Ag can be reached at 570-833-5776 or by e-mail at progressiveagricultureorg@gmail.com