Posted: 08.18.2011

According to the National Milk Producers Federation, the market management element of the dairy legislative package being readied for introduction in Congress would not have been active in 2010 or 2011. The Dairy Market Stabilization Program is intended to send quick market signals to dairy producers when milk prices drop, feed prices escalate, or the combination of those factors compresses the margins between milk and feed prices to the point where a severe imbalance has developed.

Under the legislative draft proposed by Minnesota Representative Collin Peterson and endorsed by Representative Mike Simpson of Idaho, the DMSP margin calculation will use the feed costs reported by the National Agricultural Statistics Service and the Agricultural Marketing Service -- in order to accommodate USDA reporting requirements for implementation of the program.

Neal Rea, a dairy producer from Cambridge, New York, and a member of the NMPS task force that developed the DMSP, says - the use of USDA feed price reports again demonstrates that the Dairy Market Stabilization Program will act only in those rare instances when margins are so bad that catastrophic losses of producer equity are at hand.

« back to news articles