Ag Policy Blog

The National Farmers Union is calling on Congress to help dairy farmers deal with low prices and a poor safety net.

NFU’s Board of Directors has drafted a resolution asking Congress to refund the premiums in the Margin Protection Program and provide more direct financial assistance to dairy producers.

This was already an issue brewing heading into the next farm bill debate. NFU's call is more immediate, recognizing that even if Congress began jumping into a potential new farm bill in January it could still take until the end of Congress in 2018 before a new farm bill is completed.

“U.S. dairy farmers are experiencing an extended period of very low milk prices which, unless corrected, will force thousands of farmers out of business,” the NFU resolution states. “NFU calls on Congress to advance spending legislation that includes relief for dairy farmers through additional authority for the USDA to provide direct assistance as an alternative to dairy product purchases and a refund of 2015 Margin Protection Program premiums.”

NFU points out that dairy prices have fallen by more than 40% since 2014, and that the Dairy Margin Protection Program has not performed as expected. The program is pegged to the costs of feed but the MPP does not offer support for farmers seeing milk prices come down faster than their feed costs.

USDA has tried to help farmers recently through purchases of surplus cheese, but that has only led to a minor price increase. The Class 1 base price for milk is $16.80 per hundredweight, up from the average for 2016 of $14.80. The average price for all of 2015 was $16.34 after a 2014 average price of $18.58 per hundredweight.

NFU noted dairy farmers are draining their capital reserves or going out of business.

“NFU has been appreciative of USDA’s willingness to provide support to struggling dairy producers, but the agency has run out of options for providing additional relief,” said NFU President Roger Johnson. “Congress needs to act quickly to allow USDA to directly support our nation’s dairy farmers who are struggling to stay in business.”

NFU stated its resolution came from both NFU Board of Directors and repeated requests from members of Congress, who have all called on the U.S. Senate and House of Representatives appropriations committees to provide critical, short-term support to U.S. dairy producers.

“NFU, as well as a number of other farm groups and legislators, have been sounding the alarm for months, and we have yet to see any meaningful action from the appropriations committees that would deliver support to family dairy producers,” said Johnson.

“While the ultimate aim of Congress should be to improve the long-term safety net contained in the farm bill, failing to provide short-term relief risks doing even more harm to a sector already reeling from low prices and business closures,” the resolution concludes.

The House of Representatives returns to Washington on Jan. 3.

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