By Jerry Slominski, IDFA Senior Vice President of Legislative Affairs and Economic Policy

The long fight over federal dairy policy has finally ended. A new five-year farm bill, which enjoys bipartisan support, will soon be sent to President Obama, who has indicated he will sign it.

There is no doubt that the dairy title in the Farm Bill is a historic reform of our dairy programs and clearly a step in the right direction. It is the end of over two years of debate. And it reflects the fact that despite our disagreements over the stabilization proposal, there was broad agreement across our dairy industry that the current programs should be retired and replaced with a new revenue insurance program based on margins.

That has been accomplished. The new insurance program in the final Farm Bill will protect producers against losses if milk prices drop too close to feed costs. All dairy producers will be eligible for the program and will be able to choose the amount of production to be covered as well as the margin threshold. Premiums will be lower for the first 4 million pounds of production. The legislation also authorizes a new “Dairy Product Donation Program” that allows USDA to buy dairy products, when margins are low, for immediate donation to organizations that serve low income populations.

Dairy programs are clearly one of the winners in the new farm bill. Although the bill cuts over $23 billion over the next ten years, support for dairy farmers was increased in the final bill above what was passed by both the House and Senate. And those proposals had already increased support for dairy above current levels. Yet, even with this substantial increase, spending for dairy programs will still be only about 3 percent of our government’s support for all agriculture commodities.

Congress is to be commended for finding the middle ground on the dairy title. While some may be unhappy that Congress did not impose a supply management program on the industry, the compromise was supported not just by IDFA but also by the National Milk Producers Federation and many producer groups. That’s a good thing. There are many challenges facing our industry today and we need to start working together again to solve them.

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