The House of Representatives will consider the farm bill this month. The Dairy Market Stabilization Program (DMSP), a part of the Dairy Security Act that is included in the bill, is a policy championed by some, but not all, dairy producers such as dairy farmers.
I think that the policy is misguided by design and will artificially raise the cost of dairy products by imposing quotas on the amount of milk dairy farmers can sell. It will also impede free markets.
As a dairy food processor, I urge our representatives to oppose the proposed Dairy Security Act and enact a better alternative, the bipartisan Dairy Freedom Act.
Dairy food processors rely on a steady supply of quality milk products. The origin of the proposed supply-management policy came in 2009 when the farmers’ milk price collapsed. Since then the price has rebounded.
A big part of the reason is increased exports. Restricting the milk supply will reduce exports and jobs. There may be short-term benefits to dairy farmers in restricting supply, but long-term results will hamper the entire food processing and dairy farming industry and increase consumer prices. Dairy products go into many food products beyond cheese, ice cream and, of course, milk.
According to a recent study, the DMSP would have spiked the cost of a gallon of milk at our grocery stores by 32 cents just when children were returning to school last year. It also imposes new and costly regulations on dairy food processors. The Congressional Budget Office (CBO) calls it an “unfunded mandate” because it will cost businesses over $100 million annually to implement. Of course, those costs will be shifted to consumers.
By interfering in market prices, the DMSP will discourage domestic consumption of nutritious dairy products, will hurt a growing dairy export business and will discourage further investment into dairy manufacturing facilities, at a cost of thousands of good jobs.
The bipartisan Dairy Freedom Act authorizes an effective and expanded safety net for dairy farmers, without requiring production limits or making dairy products less affordable for consumers. It is supported by a broad coalition representing the entire food industry including our nation’s largest dairy cooperative, food manufacturers, food retailers, restaurants and consumer groups and it gives a break to small farmers. The CBO says it will cost less than the Dairy Security Act.
I recognize that dairy producers need to have a fair price to survive and the Dairy Freedom Act helps insure fair prices. Please join me in urging our representatives to reject the Dairy Security Act and instead support the inclusion of the Dairy Freedom Act in the next Farm Bill.
Richard D. Draper, CEO and co-founder, The Ice Cream Club®, Boynton Beach