August 3, 2017
Clinton County dairy farmer Ken Nobis told the Senate Agriculture Committee July 25 that while he believes the dairy Margin Protection Program remains the right program for the dairy industry, “the changes Congress made to the MPP when writing the last farm bill rendered it ineffective when dairy farmers needed it the most.”
Nobis, who is also president of the Michigan Milk Producers Association and first vice chair of the National Milk Producers Federation (NMPF), spoke during a 2018 Farm Bill hearing in Washington, D.C., underlining the need for serious revisions if it is to provide farmers with effective risk management protection, which will increase participation in the program.
His full testimony can be found here.
In calendar year 2015, dairy farmers paid more than $70 million into MPP and received payments totaling just $730,000. In 2016, those figures were $20 million and $13 million, respectively. Nobis said those two years were particularly detrimental to the dairy industry. As a result, many of them have become disenchanted with the program, and participation has dwindled.
“I guarantee, if Congress alters the MPP so that it more accurately reflects the actual costs of production for businesses like mine, participation in the program will increase,” he told Chairman Pat Roberts, R-Kan., and Ranking Member Debbie Stabenow, D-Mich.
In making his case for improving MPP, Nobis detailed a list of proposed changes NMPF and its members had developed to improve it. MPP is designed to help farmers insure against either low milk prices or high feed costs, Nobis said, but the determination of the feed price used in the margin calculation is problematic. During the farm bill process, NMPF’s original proposed feed formula, though considered accurate, was cut by 10% to address other budget concerns. Based on the government profit made on the program, concerns about the budget that led to the 10% cut were misplaced, said Nobis.
Nobis said it is also important to expand dairy farmers’ access to additional risk management tools like the Livestock Gross Margin for Dairy Cattle program and similar programs that could be offered by USDA.
“Making the [MPP] program more attractive for dairy farmers is vital to ensuring participation in the program and the safety of America’s dairy industry,” Nobis said.
He also addressed several other policy challenges affecting U.S. dairy farmers, including immigration and labor shortages, and the vitality of U.S. dairy trade as NAFTA renegotiations begin. He commended Congress and Agriculture Secretary Sonny Perdue for actions taken earlier this year to reintroduce 1% flavored milk back into schools. He also thanked Roberts, Stabenow and several other congressional members for backing legislation that would support farmers’ roles as stewards of environmental sustainability.
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