Dairy Portion Of US Farm Policy Misrepresented By Media
To The Reader’s Forum:
It seems as if media coverage of the news is often presented by sources that may or may not have their facts straight. The current political arena is a good example, but as a lifelong person involved in the dairy business, I find the reported facts of the most recent U.S. dairy policy worthy of correction. In August 2015, a Post-Journal editorial by Vincent H. Smith of InsideSources.com explained how the new dairy margin protection income support program, known in the industry as the MPP program, would guarantee that most milk producers will certainly receive revenues in excess of their costs. The program allows dairy farmers to purchase coverage for their income if the price of milk falls below a certain level. As with any government program, there is no simple route to follow if a dairyman signs up, but he can be guaranteed a payment IF he buys coverage (pays a premium) that he estimates will pay him IF the price of milk falls below, say, $16.00 per hundredweight. The current farm gate prices that farmers are receiving is below $16. Farmers that bought coverage (paid a premium) in the $6 to $8 range per hundredweight will probably receive a government payout. The only problem is that on most farms, the cost to produce a hundredweight of milk is in the $18-20 range. A government payment will certainly be welcome by those who chose to participate in the program, but it will not guarantee revenues in excess of their costs as explained by Mr. Smith.
Our dairy industry has experienced many crisis periods during the past 50-60 years. The current crisis has been explained as a perfect storm of worldwide over supply and a sharp decrease in dairy exports from our country. The end result will probably be another reduction in the number of dairy farmers. I find it unfortunate that people reading media reports of another government program paying money to farmers for milk production are being misled and misinformed. I hope that Mr. Smith will visit some dairy farms and learn the real results of the MPP program on a farm’s income. The program was not necessarily conceived to guarantee a farm’s profit, but defining it as such is certainly wrong.