Dairy Farmers, Task Force Grapple With Policy Reform

Dave Lefever
Editor

HARRISBURG, Pa. — Dean Jackson's dad told him that a roomful of farmers would never agree on a solution to a problem.

But the Bradford County dairyman showed up at a special meeting Tuesday hoping to make a case for proving his father wrong on that particular point.

"There's got to be unity," Jackson said during the Pennsylvania Center for Dairy Excellence Task Force, called to solidify the state's plan of action for addressing dairy policy reform.

Jackson's call for solidarity was echoed by others at the meeting, including Gordon Hoover, director of eastern milk supply for Land O' Lakes.

"If the industry ever got unified, legislators would breathe a sigh of relief," Hoover said.

Jackson and Hoover were among about 40 attendees, including a number of dairy farmers and industry support  people at the meeting, scheduled by Acting Pennsylvania Agriculture Secretary Russell Redding to coincide with the All-American Dairy Show.

"This is a collective challenge, no question about it," said Redding on the difficulties of milk marketing and dairy policy reform.

The need for more market transparency is one point in which all dairy farmers seem to agree. And it was the first item on a list of reform priorities presented by John Frey, executive director of the Pennsylvania Center for Dairy Excellence.

The list of priorities, created by former Pennsylvania Agriculture Secretary Dennis Wolff in 2006 and entitled "Opportunities for U.S. Dairy," was updated by Frey and used as a foundation of discussion for the two-hour meeting.

While dairy product price reporting is mandated in the federal 2008 Farm Bill, it's not being carried out — supposedly because of a lack of funding. But Redding and Frey believe daily price reporting should be mandated immediately.

The topic of mandatory price reporting tied into a discussion on how $350 million in new federal funds earmarked for farmers will be spent. Congress is making final determinations on how the money, made available in a bill sponsored by Sen. Bernie Sanders (I-Vt.), will be used. The new legislation designates that most, if not all, the funds be used for retroactive Milk Income Loss Contract (MILC) payments.

However, Frey and others floated the idea that at least some of the funds should go toward getting mandatory price reporting established.

Hoover said he believes the funds should be used to purchase surplus dairy products for hunger relief, bringing inventory down and boosting the market.

The group spent a considerable amount of time discussing risk management options for farmers. Tim Kurtz, a dairyman from Elverson, Pa., said he is looking into the new Livestock Gross Margin (LGM) insurance for dairy cattle.

However, in tight times, the upfront cost for insurance is prohibitive for many farmers, noted Jayne Sebright of the Center for Dairy Excellence.

And when it comes to using the futures market for risk management, dairy farmers are often ill-equipped.

"Even the smartest of dairy farmers has a hard time figuring out when to lock in prices," said ag lender Andy Terrell.

Redding and others suggested that some federal funds be put toward risk management incentives and education for dairy farmers.

Other priorities on the agenda for reform include overhauling the federal order system, developing new markets and encouraging industry investment, strengthening oversight of trade agreements, and exploring ways the Pennsylvania Milk Marketing Board (PMMB) could create more opportunities for farmers.

Gov. Ed Rendell recently sent a letter to the PMMB asking that the board develop an analysis and set of recommendations of what more can be done at the state level to address the dairy crisis.

A similar letter will be sent to PMMB by the Pennsylvania House Agriculture and Rural Affairs Committee, according to Jay Howes, policy director for the committee.

Dairy farmer Dean Jackson was just one of several producers who testified about the hard times being experienced on the farm. Erick Coolidge of Tioga County said he just cashed in on a life insurance policy to help carry his dairy through the crisis in hopes that his son will one day be able to take over the farm.

Lolly Lesher, who produces, processes and retails milk from her Berks County farm, said that things are just as tough in the direct sales business. Her and her husband's Way-Har Farms lost "tens of thousands of dollars in August," she said. "... September is even more dismal."

The farm sells milk to 70-80 restaurants, which are experiencing a falloff in customers because of the recession. "There's milk out there because people aren't spending," Lesher said.

Returning to the unity theme, Jackson recommended that the Pennsylvania Department of Agriculture develop a "single voice" to take on the crisis. He also suggested that the department compile concrete figures that show the devastating impact of the dairy crisis on communities and take those figures to legislators.