Series of federal actions, proposals to improve dairy farm economic picture

     Since the beginning of the year, several federal moves have set the stage to boost milk prices in coming months.
     USDA's actions to purchase dairy products for school nutrition and charities, and using economic stimulus funds to purchase cheese were welcomed by producers.
     Ag Secretary Tom Vilsack's May 22 announcement of allocations for the Dairy Export Incentive Program (DEIP) will also help rebalance supplies. And, the rule to implement a promotion checkoff on imported dairy products, is another meaningful step to help dairy producers.
     The latest round of CWT's herd buyouts, combined with the first DEIP in five years is expected to impact prices in coming weeks.

The tough dairy economy has afforded change proposals in the way producer milk is priced.

     New proposals that would enable dairymen themselves to better manage milk supplies with consumer demand are being considered by dairy farmers across the country.
     The trend began more than two years ago, when National Farmers began talking about a two-tier pricing system for producers that would establish price levels based upon demand.
     Now, a grassroots dairy producer group called Dairy Farmers Working Together (DFWT) has partnered with the Holstein Association USA and announced the Dairy Price Stabilization Program.
     It is an example of a supply management program where a central authority would help match supply with demand under a quota pricing system.
     Proposals involving a growth management program, or a two-tier pricing system, would go a long way toward addressing inequities in milk markets.
     The Milk Producers Council proposal for a national milk growth management program was analyzed by Cornell University researchers, and their projections indicate it would mitigate downward price cycles as well as unpredictable market factors affecting prices.
     Without question, dairymen need a new milk pricing system that would tackle price volatility, and enable producers themselves to control their own production destinies.
     National Milk Producers Federation's move to create a Strategic Planning Task Force to help sort out the best ideas from all proposals and define an approach that will work for the majority of producers is a good, solid approach.
     National Farmers MaximumMarketing look forward to providing input to the NMPF Task Force and seeing results for producers.