Milk Producers Fight Price-Support Cut

The National Milk Producers Federation asked dairy farmers Monday to join its lobbying effort to stop a further cut in federal milk price supports scheduled by the Agriculture Department next year.

The 72-year-old federation, which represents most of the nation’s dairy cooperatives, wants Agriculture Secretary Richard E. Lyng to use his authority in the 1985 farm law to cancel the next reduction in milk supports on Jan. 1, 1989, in favor of an alternate plan to cut production.

“Enough is enough,” said federation president Tom Camerlo of Canon City, Colo. “Dairy farmers are tired of suffering continual price reductions after having done more to address federal policy concerns than any segment of U.S. agriculture.”

Buyout or Diversion

Camerlo said Lyng has the authority to set up a new whole-herd buyout or a diversion program, both of which have been used in recent years to trim U.S. milk production.

However, Lyng has been steadfast against reviving the buyout and diversion programs as an alternative to the reduction in price supports.

Camerlo and other federation officials told a news conference at the National Press Club that the 50-cent reduction scheduled for next Jan. 1 would put the milk support level at $10.10 per 100 pounds of milk, the lowest since 1979.

“Dairy farmers will have to live at 1979 income levels with 1989 costs,” he said.

Milk price supports have been lowered progressively from a record high of $13.10 per 100 pounds since 1983 to help discourage surplus production. A diversion plan to pay farmers for cutting back production, and a whole-herd buyout, or Dairy Termination Program, also were used.

The 18-month whole-herd buyout program began April 1, 1986, and continued through October, 1987. More than 1.22 million dairy cows, heifers and calves were sent to market by thousands of producers who agreed to quit the dairy business for at least five years.

About 38% of the buyout program’s cost of $1.8 billion was paid by dairy farmers themselves who were charged assessments on milk they sold. Similar arrangements helped hold down costs on the earlier diversion plan.

Costs on Upswing

Camerlo said the 50-cent reduction next Jan. 1 would come as milk production costs, including feed, are going up. The two-way crunch would add up next year to a 37% slide in dairy farm income from 1987 levels, he said.

Dairy farmers have contributed $2.9 billion in assessments since 1983 to reduce the costs of their programs by 50% overall, Camerlo said.

Federation leaders have met frequently with USDA officials, including Lyng, in an attempt to persuade them to abandon the path of lower milk supports.

“The secretary has been consistent, as has his staff, that they will cut the price,” Camerlo said. “They do not intend to utilize the authority that they have in the ’85 act to implement a whole-herd or Dairy Termination Program.”