The National Milk Producers Federation says its Foundation for the Future dairy policy program has been designed to allow the U.S. to build on its burgeoning role as a consistent global exporter of dairy products. And according to NMPF board member Les Hardesty, a dairy producer from Windsor, Colorado, – we don’t want policies that would detrimentally affect our export capabilities.
The problem the industry faces, according to Hardesty, is – the present price support program acts as a government-funded buyer of last resort for commodities including cheese, butter and nonfat dry milk powder. But the program also can act as a disincentive to export, when, during periods of low price, product manufacturers have greater incentive to sell surplus commodities to the government, rather than on the world market. The FFTF eliminates the Dairy Product Price Support Program.
Some critics have alleged the program would so greatly reduce domestic production that exports will be choked off. But Hardesty disputes that, saying the DMSP – only activates when margins are extremely low, and would not be active when domestic or international demand is sending strong signals for more milk output. The proposal also contains a provision that prevents the DMSP from kicking in if U.S. prices are 20 percent or more above world prices for cheddar cheese and skim milk powder.