High Feed, Low Milk Prices Could Mean It’s Time For Farm Bill ANDY ANDREWS Editor ROCKSPRING (Centre Co.) Plain sect farmers who don’t want to accept government money can at least reap the benefits of the new Farm Bill, with a built in dairy support program that covers market losses when milk prices drop. Simply put, all they need to do is assign a payment to the milk cooperative through an agent. The agent will ac cept the money into the co op, which could go a long way toward taking care of business debts. That was the message de livered by Ken Bailey, Penn State professor of agricultur al economics, dairy market ing and policy, Wednesday morning at Ag Progress Days. Bailey, who writes a week ly column on page Al 6 of Lancaster Farming, out lined the provisions of the Farm Bill at the House Agri culture Committee Informa tional Meeting. Answers to questions about the new Farm Bill were provided via Penn State Tuesday at Ag Pro gress Days. Those who visited the Ag Alumni Pa vilion in Rockspring could speak with, from left, Sarah Roth, Penn State extension associate; Susan Rossman, Web development; or David Blandford, Penn State Department of AE&RS. Pay ments from the Bill are expected to start in mid- October, according to USDA/FSA, who also had representatives on hand. Photo by Andy Andrews, editor This year, perhaps more than ever before, the com modity support prices come in handy as feed prices con tinue to spiral upward and milk prices drop like lead. Bailey spoke about crit icism of the Farm Bill. He was on a recent trip to Cana da, and even though their program is almost the same as ours, Lyle Vanclief, Cana dian ag minister, said, “I am appalled, I am disgusted, I am disappointed by the pro tectionist policy of the Unit ed States,” Bailey quoted. Bailey also quoted U.S. Ag Secretary Ann Veneman, wjio noted in a USDA news release that “The WTO (World Trade Organization) permits the United States to spend $19.1 billion annually for certain types of farm pro gram support. This compares to $3l billion for Japan and $62 billion for the EU (Euro pean Union).” Comparatively, the U.S. remains conservative in its support programs, relying on market strength and farm manager resourcefulness to keep agriculture strong. Bailey noted the two big issues with the Farm Bill, costing U.S. taxpayers $l7O billion within six years, will be the extension of the price support program and a spe cial National Dairy Market Loss program. (The Farm Bill is not just commodity and grain supports, but in cludes conservation, trade and market development, rural development, and nu trition.) The market loss pro gram provides a Class I floor milk price of $16.94 per CWT for Boston prices and pays the difference on 45 percent of the milk pro duced. The limit is 2.4 mil lion pounds per farm per year, which is a farm with 133 cows. A special transition pay ment will include the months staring with December 2001 up until now. Producers will get $1.04 per CWT for milk produced. “That’s a lot of money,” Bailey said. That makes up 88 percent of the milk produced in Pennsylva nia. FSA noted payment won’t be until sometime in October. The bill is targeted to small producers. But in a volatile market, many times the dairy industry has faced support prices. Bailey doesn’t believe that with the good support price, “it will not create an ava lanche of milk,” he told about 45 legislators and agri industry representatives at the meeting. The dairy industry itself is dealing with issues such as escalating feed costs, even though California continues its major herd expansion. But he believes the expansion out west will stop soon. Right now the support price will come in handy, es pecially since the price stands already at least $2.70 Ken Bailey, Penn State professor of agri cultural economics, dairy marketing and policy, spoke Wednes day morning at Ag Pro gress Days. per CWT behind last year. It’s important for agents and USDA/FSA representatives to work with producers now to “protect against rapidly falling prices.” Some of the co-ops have great forward contracting processes, which perhaps are being underutilized by pro ducers. Land O’Lakes, Dairy Farmers of America, and Dairylea have forward con tracting, which can be crucial for dairy producers. “You could have locked in at $13.50 per CWT in April” for class milk prices, said Bailey. Other speakers included Dr. Charles Abdalla, Penn State associate professor of agricultural and environ mental economics, natural resource economics and poli cy, and Alyssa Dodd, exten sion associate, Penn State, on Farm Bill conservation and waste management provi sions. Richard Pallman, ex ecutive director, Pennsylva nia office. Farm Service Agency, also spoke. Pallman noted the process of allocating payments is not a simple one. It’s simply one “tool that’s available to pro ducers,” he said. icaster Farming, Saturday, August 24, 2002-A jpastm Pasture Perfect® Dealer of the Week Bob Boyce This week Ampac Seed Company and Rohrer Seeds recognize Bob Boyce, founder and owner of Lil’ Ponderosa Enterprises of Carlisle, PA Bob is ada ment that the fam ily farm can survive. He believes that re ducing the cost of inputs while maxi mizing production and efficiency is key to successful farm ing. He advocates Managed Intensive Grazing (MIG), the ro tational method of pasture management He has adopted a holistic approach to managing soil, plants, and animals. Bob uses the Pasture Perfect® seed blends. The improved varieties developed through years of research, selection, and breeding provide the best seed on the market today. 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