As we assess the entire Foundation for the Future (FFTF) policy package, among many other things, we wanted to know how it would affect our business and yours. Since we wanted to use actual numbers, we had the National Milk Producers Federation staff assess FFTF's impact on the Hoard's Dairyman Farm had the plan been in effect from January 2009 until the present. (See page 451.)
We have been growing our herd and did not assume any cutback in milk sales when the stabilization program was in effect. We would have had deductions from our milk checks of more than $17,000. However, according to the NMPF analysis, higher milk prices resulting from the market stabilization program would have given us greater milk income overall.
We chose to purchase supplemental insurance under the margin protection plan to cover $2.50 per hundredweight of margin on 90 percent of our milk. That was on top of the $4 basic (no fee) coverage. Our premiums would have been just under $31,000, and we would have been paid $55,000.
Total benefit to our farm from both programs, according to the NMPF analysis, would have been $146,760 or about $1 per hundredweight. That suggests the program would have been good for us. We think it would have been good for the vast majority of our subscribers.
On that basis alone, we would fully support FFTF. It is the most comprehensive and most analyzed dairy policy option being considered.
Still, there remain some unknowns, and, of course, we still haven't seen the exact legislation. We have submitted a number of questions about FFTF to be answered by the NMPF staff. Some of them have been raised by subscribers, and some have come from our staff. We will be sharing answers to those questions in the magazine as space permits and on our website. Undoubtedly, there will be more questions raised at the FFTF meetings that will be held across the country this summer. We, and the industry, await the final details.
This editorial appears on page 454 of the July 2011 issue of Hoard's Dairyman