Lancaster County Dairyman Urges Senate
Agriculture Committee To Back Extension
of Dairy Price Support Program
ARDEN HILLS, Minn.-Lan
caster County dairyman Gordon
Hoover told the Senate Agricul
ture Committee at a recent hear
ing that Congress needs to
extend the dairy price support
program until the next farm bill
is completed in 2002 to help
dairy farmers who are currently
coping with the lowest prices in
a generation.
“I hope the Senate recognizes
the importance of continuing
some type of safety net for dairy
farmers when we experience ex
tremely low prices,” said
Hoover, who serves as secretary
of the Land O’Lakes Board of
Directors. “In our opinion, the
dairy price support program is
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that safety net.”
Unlike during the 1980 s,
when the price support was set
at levels that encouraged exces
sive supply, the current support
level ($9.90 per hundredweight)
is not an excessive incentive
spurring unneeded production,
Hoover said. It simply repre
sents a very modest investment
by the government in preventing
the complete collapse of domes
tic dairy prices.
In wide-ranging comments
about the current state of the do
mestic dairy industry, Hoover
testified on behalf of the Na
tional Milk Producers Federa
tion at the first of two days of
Senate hearings on dairy policy.
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Hoover is a Land O’Lakes repre
sentative on the NMPF board.
Land O’Lakes is the nation’s
second-largest dairy coopera
tive.
In the last two months, farm
level dairy prices have dropped
to the lowest level since 1978,
leaving many producers reeling.
Earlier this month, Agriculture
Secretary Dan Glickman said
the Clinton Administration
would ask for a two-year exten
sion of the dairy price support
program.
Hoover said this is the
number one goal for dairy farm
ers this year on Capitol Hill. It’s
a goal with broad support
among cooperatives and farm
Member F.D.I.C
organizations. Currently, the
price support program is sched
uled to end on Dec. 31,2000.
Another important economic
tool for dairy producers is the
Dairy Export Incentive Program
(DEIP), which helps the U.S.
dairy industry compete in inter
national markets with heavily
subsidized exports from the Eu
ropean Union and other nations.
Hoover told the Senate panel
that, given the apparent intent
of other nations to maintain
their dairy export subsidies,
“Congress should reauthorize
the DEIP program prior to its
expiration in 2002 in order to
help keep the U.S. competitive
in world markets.”
Another looming dairy issue
with international implications
is the possibility that U.S.
cheesemaking standards could
be changed to allow for the use
of dry milk protein concentrate.
If the Food and Drug Adminis-
and
Lancaster Farming, Saturday, March 11, 2000-A2l
tration were to allow for the use
of concentrated, dried forms of
milk protein, cheap imports of
the concentrate could displace
domestically-produced milk,
driving prices that American
farmers receive even lower, ac
cording to Hoover.
“Milk production concentrate
produced by heavily-subsidized
foreign dairies could be exported
to the U.S. for less than it costs
to produce a similar product
here. And that foreign milk
supply would directly displace
billions of pounds of U.S.-
produced milk that is now used
to produce cheese,” Hoover
said. “I hope this committee will
monitor this issue very closely,
and give thoughtful considera
tion to the economic calamity
that would be produced by such
a change in cheese standards.”
Hoover also assessed the
recent reforms of the Federal
Milk Marketing Order program,
which were implemented on
Jan. 1 after two years of admin
istrative and legislative review.
He said that although a great
deal of the focus during the
reform process was on Class I
differentials, “there are many
other significant changes in the
new system that will improve
the system and make it more
market-oriented.”
Hoover also said that NMPF
will be working this year to pro
mote industry unity through the
sponsorship of the Dairy Pro
ducer Conclave, a series of re
gional grassroots meetings co
sponsored by other national
farm groups that also want to
focus on policies of mutual con
cern to all U.S. dairy producers.
“After the regional sessions,
our steering committee of na
tional dairy leaders will consider
the input we’ve received at the
regional sessions, and attempt to
build a consensus program of
issues and policies for the future.
We intend to complete this pro
cess by December 31st, and will
be back to this committee, and
to your colleagues on the House
Agriculture Committee, with
our ideas and plans. Dairy pro
ducers must try to resolve our
regional differences first, and
then attempt to reach consensus
with the processing segment of
our industry,” Hoover said.
The Dairy Producer Conclave
will address milk prices, but also
a variety of other issues, such as
trade, animal health, environ
ment, and food safety, that have
the potential to impact the eco
nomic environment for farmers.
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