Dairylea President Testifies For Government Purchases
SYRACUSE, N.Y. Price
support through government
purchases is at the heart of any
workable dairy program, accord
ing to Clyde Rutherford, president
of Daiiylea Cooperative.
Rutherford, a past chairman of
the National Commission on Dairy
Policy (NCDP), testified June 18
before the U.S. House of Rep
resentatives Agriculture Subcom
mittee on Livestock, Dairy and
Poultry.
In his testimony, Rutherford
talked about similarities between
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the commission’s recommenda
tions, which were issued in March,
and a program by the National
Milk Producers Federation
(NMPF) to balance milk produc
tion and consumption.
Overall, Rutherford said that the
NMPF plan has broad industry
support and would achieve most of
the goals of the NCDP.
He told the subcommittee that
both the recommendations of the
NCDP and the NMPF plan indi
cate that an adequate milk supply
is dependent on a minimum federal
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support price.
In addition, balancing the
domestic market through purch
ases of dairy products should be
the job of the Commodity Credit
Corporation (CCC), and the CCC
should maintain reserves for
national and international food
assistance programs.
Market forces, together with
adjustments in the government
support price, should be used to
balance supply and demand for
dairy products, according to the
commission’s report. It recom
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Cooperative Inc., testifies before the U.S. House Ag Com
mittee about national milk market balancing. Also testifying
is Fred Douma, chairman of the Dairy Farmers For Respon
sible Dairy Policy, an organization representing southern
California dairymen.
mends also that the support price
should not flucuate by more than
30 cents per hundredweight (cwt.)
of milk per year.
Rutherford said that similarly,
the NMPF plan calls for an $11.60
per cwt. support price floor to be
established for the remainder of
1991.
The support price would be
adjusted each Jan. 1, starting in
1992 and continue through 1995,
with the adjustments not exceed
ing 50 cents per cwt. in any one
year.
In addition, the cost of CCC
purchases each year would not
exceed five billion pounds of milk
equivalent, on a total solids basis.
Assessments would be levied on
production to pay for purchases in
excess of five billion pounds.
Further, there is a two-tier produc
tion control program recom
mended, should estimated purch
ases exceed seven billion pounds.
According to Rutherford, the
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NMPF plan calls for a producer
elected board with the responsibil
ity to fund, manage and market
dairy product purchases in excess
of five billion pounds.
“Safeguards are built into the
NMPF production control plans,”
Rutherford said. Producers in
areas of the nation with high fluid
milk utilixation would be exempt
from some restrictions applied to
the industry when CCC purchases
exceed seven billion pounds.
And, should a substantial price
rise occur, indicating milk is in
short supply, the secretary of agri
culture can terminate the produc
tion control program.
Rutherford said the commission
and NMPF support a government
policy that would allow milk pro
ducers to receive a satisfactory
return for their labor and invest
ments, which is not the current
condition for the majority of
dairymen.
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