US House of Reps hears call for dairy reform

Posted by Nicole Eckersley on 22nd April 2010

The US House of Representatives was called upon on Tuesday to reform dairy policy and pricing mechanisms to assure a viable future for the country’s dairy industry.

Addressing the House, Pennsylvania Agriculture Secretary Russell Redding insisted that US dairy producers are facing “historic challenges” from falling milk prices to depressed land values.

“The overall loss of cash-flow, coupled with losses in real estate values, has diminished or nearly eliminated equity on some of our most progressive and forward-looking farms. After a slight increase in milk prices at the turn of the year, prices are beginning to erode again, making it difficult for producers to rebound,” Redding warned.

“We must look at bolstering existing programmes and exploring new ways to maintain a vibrant dairy industry. Most of the dairies that have survived to-date will find it difficult to say the least to make it through another downturn, especially one as protracted as the crisis we are still working through.”

Redding called on the US Department of Agriculture and Congress to encourage dairy producers to use risk management tools – and foot some of the bill by supplementing the costs of risk management .

Regulators should also move to improve price discovery with a “reliable” and “transparent” method for dairy commodities that tales into account pricing surveys and input cost calculations, he suggested.

“The current systems used to discover prices, manage risk, protect farm income, secure financing, and bolster farm equity must be revisited before we can truly move past this crisis,” Redding told the House committee.

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