Congress Starts Farm Bill Talks; Dairy Revisions Being Discussed

U.S. dairy industry faced difficult economics in 2016 with dropping milk prices. However, many producers felt the government safety net in the 2014 farm bill did little to help.  As work starts on the 2018 farm bill, the House Agriculture Committee heard shortcomings of the present act and challenges of a farmer-friendly version.  Scott Brown, University of Missouri Extension dairy economist, testified Feb. 15 in Washington, D.C., before the committee in the House of Representatives.  Dairy policy is not easy, Brown testified. Estimates when forming the 2014 Dairy Margin Protection Program (MPP) did not work as planned. MPP made a big shift in dairy policy. It went from the long-used price support to selling risk management on dairy farm margins between feed costs and milk income. Dairy farmers familiar with milk prices didn't accept margin protection as expected. In 2016, they needed help and MPP paid very little. Milk prices fell from $24 per hundredweight in 2014 to $16 in 2016. Changes in global milk economy affected U.S. producers. Global milk supply grew while a strong U.S. dollar cut U.S. exports. "Domestic milk supply and strong dollar still face U.S. producers in 2017," Brown said. Despite tough times, U.S. dairy herd continues to grow. The recent cow count shows 48,000 cows were added in 2016.