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Perspective:
Industry Issues

Shared solutions succeed in Farm Bill

Michael Dykes

Michael Dykes is president and CEO of the International Dairy Foods Association. He contributes this column exclusively for Cheese Market News®.

The International Dairy Foods Association is pleased to support the Agriculture and Nutrition Act of 2018 that was approved last week by the House Committee on Agriculture. Thanks to the efforts of House Agriculture Committee Chairman Mike Conaway, R-Texas, and the members of his committee, this farm bill provides new health benefits for consumers and empowers dairy processors and producers with key provisions that will allow us to enhance the American economy.

IDFA’s economic impact tool, Dairy Delivers, shows that U.S. dairy products companies support nearly 3 million jobs, generate more than $39 billion in direct wages and have an overall economic impact of more than $200 billion. Our powerful engine for American jobs and economic stimulus will only continue to contribute and grow under this farm bill.

• Collaboration creates success

The dairy provisions included in the bill also represent the positive outcomes we can gain through sustained industry collaboration. In preparation for the farm bill debate, which began last year, IDFA worked closely with the National Milk Producers Federation, and we united behind shared solutions for dairy, which I outlined in my December column for Cheese Market News and which are now included in the bill.

We’re hopeful that our efforts will help to smooth the ultimate enactment of a farm bill that offers enhanced risk management options for dairy processors and producers and establishes a retail incentive program in the Supplemental Nutrition Assistance Program, or SNAP, that includes fluid milk.

Working together, IDFA and NMPF made sure the committee members understood that the beverage case offers many options today and, in this competitive marketplace, it’s important for milk producers and processors to be able to decrease milk price volatility through the kind of market risk hedging already available to the rest of agriculture. The bill approved last week would change the Class I fluid milk mover from the higher of Class III and Class IV to the simple average of Class III and Class IV, plus a $0.74 adjustor.

With this new pricing provision in place, both producers and processors would gain much-needed benefits from hedging fluid milk through the futures market.

The bill also would extend the Dairy Forward Pricing Program for all other classes of dairy products through 2023 and make additional changes to the Margin Protection Program beyond those included in the recently enacted omnibus funding bill.

Finally, the bill also includes a new voluntary retailer program within SNAP that would fund up to 25 percent of the cost of in-store incentives designed to encourage SNAP participants to purchase fluid milk, as well as fruits and vegetables.

We’re fortunate that Chairman Conaway shares IDFA’s view that a thriving agricultural industry is healthy for the American economy, and he understands the significant role that the dairy industry plays. In addition, House Agriculture Committee Ranking Member Collin Peterson, D-Minn., has worked to help the dairy industry and supports the shared solutions offered by IDFA and NMPF.

• What happens next?

Based on conversations we’ve had with committee staff members, we believe the House could consider the farm bill on the floor as early as the second week of May. We also know that the leaders of the Senate Committee on Agriculture, Nutrition and Forestry are continuing to negotiate a bill that could be introduced next month for consideration at the committee level.

The 2014 Farm Bill will expire Sept. 30, 2018, which is the end of the government’s fiscal year. The last time Congress passed a farm bill on time was in 1990, so it’s possible that the current farm bill could be extended beyond September if Congress is unable to pass another five-year farm bill before then.

We hope an extension won’t be necessary. For our part, IDFA and our members are committed to ensuring that all members of Congress understand the importance of these provisions to the nearly 3 million Americans in jobs supported by the dairy industry and to the overall health of the U.S. economy. We’ll continue to advocate for the forward-looking provisions contained in this farm bill and encourage everyone working in or with the U.S. dairy industry to do the same.

As the House and Senate continue their efforts on the next farm bill, this is the perfect time for dairy leaders to share stories about how these critical policy issues and provisions directly affect your companies and communities. And if IDFA can help you with your outreach efforts, please be sure to let us know.

We truly value collaboration and are pleased to see the results of our joint efforts included in this farm bill. It’s a shining example of what we can accomplish when we work together to make a positive difference for dairy.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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