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Dairy Industry Testifies Before Senate Agriculture Committee

posted on July 21, 2006

Hello, I'm Mark Pearson. The new chairman of the Federal Reserve went before Congress this week in a stoic performance meant to calm fears over rising inflation, a sagging housing market, and weakening stock prices. *Ben Bernanke told lawmakers the Fed will continue to moderate the economy to keep inflation under control, *a strategy that over the past two years has meant a steady increase in interest rates. *But Wall Street was placated enough by the chairman's remarks to rally 200 points on the Dow after his testimony. The actions taken by the Fed are critical to the capital-intensive agriculture industry ... equally as important as legislative activity. Dairy farmers rediscovered the importance of the latter this week as Congress once again looked into the future of federal dairy programs.

Dairy Industry Testifies Before Senate Agriculture Committee

The Senate Agriculture committee this week, drew quite a crowd as the discussion focused on changes in the dairy industry that will need to be addressed as Congress prepares for the 2007 Farm Bill.

Those in the dairy business testifying before the committee do not appear pleased with the state of the industry or with some of the current government programs.

Leon Berthiaume, General Manager & CEO, St. Albans Cooperative Creamery, St. Albans, Vermont: "We are experiencing again depressed milk prices, some that bring us back to 2002 and 2003, but can alos bring us back to 1979."

Ken Hall, dairy producer, Terreton, Idaho: "Since 1981, commercial dairies have been reduced from 225,000 to 64,000, a 72% reduction. This begs the question, are the government dairy support programs working? The short answer is no."

While the committee got an earful on domestic farm policies, they also listened to concerns over world trade – an issue that will definitely affect the content of the next Farm Bill ... particularly with international pressure on "rich" countries to do away with certain subsidies.

Charles Beckendorf, Chair of National Milk Producers Federation: "Congress should be involved in carefully reviewing future trade agreements as well as providing our negotiators the necessary resources to negotiate and monitor trade agreements."

Over the decades, Congress has approved a network of complex dairy policies that has included dairy compacts, base-excess plans, state regulations, voluntary supply controls, the Milk Income Loss Contract or MILC, and the Federal Milk Marketing Order.

Committee Chair, Senator Saxby Chambliss, a Republican from Georgia, readily admits that government policies often have regional effects that are not embraced nationally. But he told the room – in essence – get used to it.

Senator Saxby Chambliss, (R) Georgia: "We've got to develop a cookie cutter approach that is going to have to apply to all farms. You all continue to think about how we're going to look forward to operating with less money. We don't know what those numbers are going to be but we may have to operate within a different atmosphere from a trade perspective."

The Senate agriculture committee will hold another hearing on dairy in the fall.


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