Yesterday, the National Milk Producers federation board of directors approved a recently formulated proposal that will request a major overhaul of U.S. dairy policy. The group's goal is to better protect dairy producers and position them more favorably in an increasingly volatile global marketplace.
The group of concepts is being titled "Foundation for the Future" and according to NMPF CEO Jerry Kozak, the package will be used as the basis for the future direction of the dairy provisions in the next Farm Bill or in some other form of federal legislation that Congress may consider in the future.
"If there is anything good that has come out of the past 18 months of economic struggle, it's the shared feeling among NMPF's members that we can use this experience as the catalyst to make needed changes in dairy policy," said Randy Mooney, NMPF Chairman and dairy farmer from Rogersville, Mo.
NMPF's plan calls for transitioning the existing safety nets of the Dairy Product Price Support and Milk Income Loss Contract Programs into a new Dairy Producer Margin Protection Program to guard against periods of severe financial pressures; establishing a Dairy Market Stabilization Program to help address periodic imbalances in milk production and demand; and reforming the Federal Milk Marketing Order Program.
The Federation's proposal to revamp the federal safety net involves creating an insurance program tied to the margin between the national average cost of feed and the national average all?milk price. After farmers choose to enroll in the base level of the Dairy Producer Margin Protection Program at no cost to them, they would receive indemnity payments during periods when their margins are severely compressed, as they were for most of 2009. In addition, farmers would have the option of purchasing supplemental coverage to protect a higher margin level between feed costs and milk prices.
Kozak said that NMPF will now begin a comprehensive education effort to inform the entire dairy producer community, as well as policymakers, about the merits of Foundation for the Future.