Dairy manufacturers oppose government control of supply

Dairy manufacturers oppose government control of supply

Dairy manufacturers would be directly regulated by the Dairy Security Act, H.R. 3062, as proposed by the National Milk Producers Federation, the trade association representing the dairy coops, and introduced by Rep. Collin Peterson (D-MN). But will the proposed measure stifle growth?

The House Agriculture Committee did not ask any dairy manufacturers to testify at the field hearing held last Friday in upstate New York on the Farm Bill.  The dairy panel included three New York dairy producers who spoke in support of legislation that manufacturers oppose because it will stifle New York's rapidly growing dairy food industry and unnecessarily burden the free market with export-killing regulations.

Dairy manufacturers would be directly regulated by the Dairy Security Act, H.R. 3062, as proposed by the National Milk Producers Federation, the trade association representing the dairy coops, and introduced by Rep. Collin Peterson (D-MN).

H.P. Hood LLC, which operates five dairy plants in the state of New York, and Great Lakes Cheese Co. Inc., which owns two processing facilities in New York, submitted letters to Representatives Christopher Gibson (R-NY) and Bill Owens (D-NY) for the hearing record, voicing their opposition to the Dairy Market Stabilization Program (DMSP) and support for changes to the Federal Milk Marketing Orders.

The letter from H.P. Hood LLC says in part, that the "DMSP will be a gross and unnecessary intrusion of government into dairy markets. It will decrease milk supply by periodically requiring HP Hood to reduce milk payments to our suppliers and submit the difference of those payments to USDA."

The letter from Great Lakes Cheese Co. states, "We believe such direct government intervention in commercial dairy market transactions is not good public policy and will have a negative impact on New York's growing dairy industry. It will unpredictably limit milk supplies, likely at times when more milk is needed for our New York facility to meet demand. It will impact business decisions on when and where to invest in new facilities and new product lines. What businessman wants to invest to grow their business only to find out that the government forces them to operate below capacity?"

"There are two sides to every story," said Jerry Slominski, senior vice president of legislative and economic affairs at the International Dairy Foods Association, which represents the nation's dairy manufacturers.  "At Friday's hearing, the House Agriculture Committee heard only one side, from the dairy coops."

"We would also like to correct the misinformation put forth by the dairy coops at Friday's hearing," added Slominski. "The milk supply control program included in the legislation is not voluntary. Dairy producers may not participate in the risk management insurance offered as part of the bill unless they sign on to the supply controls."

Friday's hearing was the first of four meetings across the country that the House Agriculture Committee is holding to gather input for the upcoming Farm Bill.

"Let's hope there is room for both sides of the debate at the remaining scheduled hearings," added IDFA's Slominski.

The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies representing a $110-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85% of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States. IDFA can be found online at www.idfa.org.

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