The Flip Side

Latest budget proposal troubles dairy farmers.
The 2007 fiscal year budget proposal released in February by the White House includes major areas of concern for dairy farmers and agriculture in general, says the dairy farmer leadership of Dairy Farmers of America Inc. (DFA).
“If the package was voted on today, dairy farmers and farmers across commodity groups would be in serious trouble,” says Tom Camerlo, DFA board chairman and a dairy farmer from Florence, Colo. “The reality is the proposal has already met significant public opposition from Congressional members. While it is far from final, this proposal does, indeed, set the tone for farmers as we face the drafting of the 2007 farm bill.”DFA says the proposed budget unfairly targets agriculture for much greater cuts on the order of 5 percent as compared to agriculture’s much smaller share of overall government expenditures of 1 percent.
Of major concern to DFA’s dairy farmer members is the proposal to reduce the value of the price support program through price support “tilt” adjustments. Further adjustments to the price support tilt will reduce support to dairy farmers by significantly more than the 5 percent cut called for in other commodity payments. Also very troubling, says DFA, is the Bush administration’s proposed 3 cent per hundredweight “tax” on all milk production.
Camerlo explains that such a tax would come at a time when dairy farmers are already burdened by high fuel, utility and feed costs. “Dairy farmers, not the U.S. government, have voluntarily financed and implemented the Cooperatives Working Together (CWT) supply management program,” he says. “Since 2003, U.S. dairy farmers have contributed more than $213 million to reduce milk supplies by nearly 3 billion pounds through herd retirement programs, a reduced production-marketing program and enhanced exports.”
In addition, DFA argues, there are a number of commodity support programs at stake which are of interest to dairy farmers. Payments to farmers from all commodity programs including marketing loans, direct and counter cyclical payment, and the Milk Income Loss Compensation (MILC) program would face 5 percent cuts under this proposal.  
Faces at the forum
What industry leaders were talking about at the 2006 Dairy Forum
How have escalating energy costs impacted your business?
“We use more computerization for more effective routing. We look for better ways to save fuel and be more efficient. I think we’re being successful in using methods other than price increases.”