Reviewing the State of the Dairy Economy

House Agriculture Committee Subcommittee on Livestock and Foreign Agriculture Chairman Jim Costa of California delivered the following remarks at the subcommittee on reviewing the state of the dairy economy.

As prepared for delivery:

“America’s dairy industry is in crisis, and today’s hearing is just one part of this subcommittee’s continued effort to respond to the challenges facing dairy farmers across this country. Addressing these critical problems is a top priority for the Livestock and Foreign Agriculture Subcommittee. The United States lost nearly 20,000 licensed dairies over the last ten years. Nearly every day, it seems, there is another national news story about family farmers making the tough choice to stop milking cows.

California is the nation’s top milk producing state and many dairies in my district have been passed down from generation to generation, including the one I grew up on. The issue of dairy is personal to me and will continue to be a major focus going forward.

Dairy directly provides nearly 1 million U.S. jobs with an economic impact of over 200 billion dollars nationwide. In my district alone, dairy contributes over two billion dollars to the local economy. When we lose a dairy farm, we also lose the jobs and investment that the farm provides.

Congress worked hard to make bipartisan improvements to the dairy safety net in the last farm bill. Yesterday, I met with USDA Undersecretary Bill Northey who told me they are making progress on getting the new Dairy Margin Coverage program implemented. This morning, USDA will announce an online decision tool that will let farmers estimate how Dairy Margin Coverage would work for them, and as soon as later this week, USDA will send out letters to dairy farmers that participated in the Margin Protection Program to let them know what premium refund or credit they will be able to receive.

These updates are good news, but unfortunately the expected start of Dairy Margin Coverage sign-up is still June 17. I appreciate the priority that USDA has put on implementing the dairy program, but I know time is of the essence for many dairy farmers who have endured years of low margins and can’t hold on much longer.

One program does not fit all farms equally. That’s why I strongly supported opening up more Risk Management Agency insurance products for dairy farmers and made sure that farms could participate in both Dairy Margin Coverage and Livestock Gross Margin insurance for dairy.

In addition to thorough farm bill implementation oversight, this subcommittee will also focus on other issues impacting dairy farmers. U.S. dairy is fighting hard in global markets in the face of challenges but the new wins we are seeing are wins that should have been there all along. Mexico is the top destination for U.S. dairy and needs to be maintained. While the U.S.-Mexico-Canada Agreement still allows Canada to keep the bulk of their current domestic system, the recent International Trade Commission economic analysis of the proposal forecasts over $300 million of additional dairy exports under the terms of the new agreement.

A workable immigration solution for agriculture is long overdue and I have been calling for one for years. We in Congress need to find ways to address challenges with both current and future work force needs including access to a year-round visa program. A legislative fix is being worked on and I took heart in Secretary Sonny Perdue’s call for legislative reform to ensure access to a steady workforce. When a plan is finalized, I am hopeful the Secretary will continue to be a champion for this cause.

With so many challenges bearing down on dairy farms, I am committed to actively prioritizing policies that positively impact dairy farmers and their families, and I will continue to engage with USDA as we get closer to the beginning of the program sign up period on June 17. We need to do right by our dairy farmers and the rural communities they support, and I look forward to the conversation today.”

Others testify

Also at the hearing, National Farmers Union (NFU) President Roger Johnson submitted written testimony highlighting the considerable financial difficulties American dairy producers have withstood for the past several years.

NFU Vice President Patty Edelburg, who co-owns and operates a dairy farm in Amherst Junction, Wisconsin, has witnessed the devastation first-hand. “For more than four years, dairy farmers nationwide have been paid well below the cost of production” she said. “It would take years of profitability for many family dairy farmers to rebuild their equity and get their farms back on stable footing. With mounting piles of debt and no significant price rebound in sight, thousands of family farmers have been left with no choice but to close their doors.”

While short-term support is critical to help farmers survive the immediate economic challenges, Edelburg recommended that legislators also pursue long-term solutions to overproduction, which has plagued the industry for some time. “The 2018 Farm Bill provides improvements that will help stem losses for many family farmers, but this support alone won’t be enough to save the dairy industry. We need to have a meaningful conversation about supply management options that will ensure dairy farmers are paid a fair price from the market.”

Source: Morning Ag Clips

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