Ag Policy Blog
Jerry Hagstrom DTN Political Correspondent

Wednesday 11/06/13

Lucas Questions Dairy Supply Provisions in Senate Bill

Comments by a couple of members of the House-Senate farm bill conferees reflect some evolving views on dairy provisions in the farm bill.

House Agriculture Committee Chairman Frank Lucas, R-Okla., now opposes the provision in the proposed Dairy Security Act that the dairy farmers call market stabilization and the dairy processors, who oppose it, call supply management, a Texas newspaper reported.

“Lucas said he does not support the supply management component included in the language passed by the Senate, calling it a ‘controversy that needs to be worked out,’” The Lubbock Avalanche Journal reported Saturday after Lucas made a visit to that city.

A House Agriculture Committee spokeswoman for Lucas did not respond to a request for comment on the report.

The Dairy Market Stabilization Program remains language in the Senate version of the farm bill. It reduces incentives to produce milk on a sliding scale when the production margin is less than $6 to $4 per hundredweight. The goal, as supporters state, is to send signals to producers to make adjustments in production to avoid risking margin losses. Just a year after the 2008 farm bill passed, international markets collapsed for producers, putting a glut of dairy products on the U.S. market. At least some dairy farmers failed because of the price downturn.

Lucas supported the Dairy Security Act when House Agriculture Committee ranking member Collin Peterson, D-Minn., presented it to the committee. The measure passed in the committee and was part of the farm bill that came to the House floor, but Rep. Bob Goodlatte, R-Va., succeeded in passing an amendment to remove the market stabilization/supply management feature.

Lucas did not vote for the Goodlatte amendment.

A source close to Lucas said he considers the matter an issue for Peterson and House Speaker John Boehner, R-Ohio, to resolve.

Boehner has been vigorous in his opposition. Peterson said last week that he will fight against inclusion of the Goodlatte amendment in the dairy title and that if the conference committee will not accept the full Dairy Security Act he favors reauthorizing the current dairy program including the Milk Income Loss Contract program with rates that were established in the 2008 farm bill.

Meanwhile, Sen. Michael Bennet, D-Colo., who is also a conferee on the bill, told the Greeley [Colo.] Tribune that he favors the House version.

Asked if there were any parts of the House-passed farm bill that he preferred, Bennet said, “To be quite honest, I like the House’s version of the dairy programs better than what the Senate version has in it.”

“Colorado’s dairy industry, in addition to supplying local markets, depends heavily on exports,” Bennet said. “The House’s version has a price support program that’s better suited for producers who export, while the Senate’s farm bill ... pieced together by lawmakers from states where milk producers mainly supply local markets ... doesn’t address the needs of milk exporters. I’d really like to get some of the House’s language into the final version of the dairy policy.”

Posted at 1:24PM CST 11/06/13 by Jerry Hagstrom
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