Dairy supply management bad for consumers

Plain and simple — the farm bill should not be used as an avenue to increase dairy prices and distort the dairy market. As the House prepares to consider the Federal Agriculture Reform and Risk Management Act — also known as the farm bill — a new dairy supply management program included in the legislation threatens to push dairy prices higher.

The farm bill being brought to the House floor contains a program called the Dairy Market Stabilization Program (DSMP) that will manipulate and control the supply of milk produced and sold in the United States. This will result in a spike in milk prices and the cost of dairy products like cheese, yogurt and ice cream. As dairy prices are artificially inflated, consumers will be faced with the dilemma of either taking the hit of these high prices or simply avoiding the dairy aisle in the grocery store altogether. 

The Consumers Union, Consumers Federation of America, Consumer Action and National Consumers League all oppose the dairy supply management program in the farm bill because it would “increase milk and dairy product prices for consumers.” Increased dairy prices mean that families will be forced to stretch their food budgets further. 

In essence, the dairy program passes the bulk of its costs down to the consumer, harming the public economically as well as nutritionally. The federal government purchases 20 percent of domestic milk production for use in anti-hunger programs. If the price of milk goes up due to effects of the program, so will the cost of our nutrition programs like the Supplemental Nutrition Assistance Program, Special Supplemental Nutrition Program for Women, Infants, and Children and the National School Lunch Program. Professor Scott Brown with the University of Missouri recently released a report that showed that under Dairy Market Stabilization Program, monthly milk price spikes could raise school milk costs by more than $13 million for just one month! Our local school districts, families on budgets and taxpayers cannot afford to absorb these increased costs.

It is clear that supply management is bad for consumers.

During the farm bill debate, we will offer an amendment to provide dairy farmers with a viable safety net that does not prop up the price of milk. This amendment strikes the DMSP that limits supply, controls industry growth and meddles in the free market. The reforms in the Goodlatte-Scott amendment will give farmers the necessary tools to manage their risk without requiring them to participate in yet another government program. Our amendment will protect dairy farmers, but also lower costs for families and businesses, as well as keeping nutritional programs viable for those in need.

While the farm bill addresses reforms for numerous facets of our agriculture policy, it fails to adequately reform our country’s dairy program. We can help dairy farmers by providing risk management tools, such as the Dairy Producer Margin Protection Plan included in the Goodlatte-Scott amendment, which would provide help in tough times without negative dairy market consequences. 

As we mark National Dairy Month in June, there is no time like the present to reject the Dairy Market Stabilization Program and embrace dairy policies that will keep dairy products affordable for the American people. The Goodlatte-Scott amendment to the farm bill will help dairy producers without forcing the consumer to pick up the bill. 

Goodlatte and Scott are members of the House Committee on Agriculture.