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Top US dairies urge Senate to drop milk production controls

By Mark Astley+

04-Oct-2013

Top US dairies urge Senate to drop milk production controls

Dean Foods, Nestlé USA, Dannon, Saputo and Kraft Foods are among scores of US dairy processors calling on the Senate to accept a version of the 2013 Farm Bill that omits a program designed to periodically limit milk supplies.

A total of 28 dairy processors have urged eight Senate conferees via letter to pass a version of the highly debated Farm Bill that does not include the Dairy Market Stabilization Program (DMSP) - a system designed to reduce margin volatility for dairy producers.

The DMSP was developed to warn milk producers voluntarily participating in the program that a small temporary adjustment to their milk production may be needed to prevent long-term reductions in their overall margins.

It was included in a version of the Farm Bill passed by the US Senate in June. In July, however, the House rejected it by 291 votes to 135.

According to the International Dairy Foods Association (IDFA), which represents each of the 28 petitioning US dairy processors, omitting the DSMP from the Farm Bill will allow “dairy companies, particularly dairy exporters, to continue to grow and create jobs.”

In the eight letters, which were published by the IDFA earlier this week, the Senate conferees were urged “to ensure that the dairy language to strike milk supply management, as included in the House version of the Farm Bill, is incorporated in the final conference bill.”

According to the 28 signatories, which also included WhiteWave Foods, Schreiber, and infant formula manufacturer Abbott Laboratories, the DMSP would ultimately make their “products less competitive in the marketplace.”

“The Senate bill would require dairy farmers enrolled in a margin insurance program to periodically limit the amount of milk their farms can sell,” said the letters.

“We believe this convoluted system is the wrong approach,” it added. “Dairy farmers who take advantage of the margin insurance should not be required to participate in a program that would have the government directly interfere in the milk supply. Limiting the milk supply will discourage further investment and growth in our industry and will impose additional and unnecessary burdens on our businesses.”

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