Edge conveys Farm Bill priorities to Sonny Perdue

John Pagel, board president of Edge (left), met with Peter Bachmann, policy adviser to Secretary of Agriculture Sonny Perdue, earlier this month in Washington, D.C., to talk about Farm Bill priorities for the members of our dairy farmer cooperative (formerly Dairy Business Milk Marketing Cooperative). Those priorities were outlined in a follow-up letter to Perdue. Edge’s director of government affairs, John Holevoet (not pictured), joined Pagel for the meeting, which was one of a number of Capitol Hill visits.

 See letter below:

November 8, 2017

Honorable Secretary Sonny Perdue

U.S. Department of Agriculture

1400 Independence Ave., S.W.

Washington, DC 20250

Dear Honorable Secretary Perdue:

On behalf of the members of the Dairy Business Milk Marketing Cooperative (DBMMC), we are writing to outline our priorities for the ongoing work being done on the next Farm Bill. Founded in 2010, DBMMC grew rapidly to now representing around 800 dairy farms of all sizes across the Midwest. Our members contribute more than 850 million pounds of milk monthly to our food supply. According to the most recent rankings, we are the fifth largest dairy cooperative in the nation in terms ofthe amount of milk our members produce.

Our agricultural community understands the benefits of better trade and market access. We appreciate your leadership on these issues in the past. Part of our approach must include continued strong funding for both the Market Access Program and Foreign Market Development. These programs have some of the best potential for return on investment of any USDA expenditure.

Besides working to advance our demand outside the country, we believe that there are opportunities for dairy products to provide high-value nutrition to more consumers right here in the United States. The nutrition title presents us with an excellent opportunity to ensure every segment of society has access to the nutritional benefits that milk and dairy products provide.

The 2014 Farm Bill established the Food Insecurity Nutrition Incentive (FINI) grant program to incentivize SNAP participants to purchase fruits and vegetables. We believe there is a compelling case to be made for expanding the FINI program to include dairy products. Increasingly, researchers are highlighting the nutritional benefits of the healthy protein, calcium and fats found in milk and other dairy products, broadly. These nutrients are critical in the development of strong, healthy children. Many of the Americans that benefit from SNAP are children, an important reason to consider ways to ensure that SNAP helps provide access to dairy products.

DBMMC believes our farmers’ have and will continue to benefit from such consumer-facing programs. They are crucial to the long-term sustainability and growth of our industry. At the same time, the traditional commodity-support programs in the farm bill are still important. These programs and other risk management tools have a direct impact on dairy farmers’ ability to earn a living. Our farmers want to fully utilize the tools our government provides for their success, but it is important that these programs do not waste our limited resources.

Many of our members feel let down by the Milk Margin Protection Program (MPP). MPP was sold to dairy farmers as a cost-effective safety net, but it has fallen far short of expectations. We realize that work has already been done to improve MPP through the appropriations packages and by other actions taken by USDA. DBMMC supports those actions.

A lot of focus has been on changing the feed cost formula to what was originally proposed. This change would make MPP more functional, but it is unlikely to restore producer confidence in the program. Also, it is no secret this change will be very costly. At a time when budgets are being highly scrutinized, this change could be unpalatable for lawmakers. Therefore, being prepared to look beyond MPP for risk management is important for dairy farmers.

Whether through a government program or the private marketplace, risk management is essential in today’s dairy market. Many farmers are already using the private market for managing risk because of the lack of a viable government option, and they have been successful doing so. DBMMC recognizes the need for a government-sponsored risk management options, but limited funding may mean these programs have limited reach.

In our view, it would be helpful to move toward more market-driven tools to better serve dairy farmers. There needs to be a range of options to account for diversity in the comfort levels farmers have in deciding what tools they can use to manage risk. We could reach a large group of farmers with educational outreach about market-based risk management at a comparatively low cost. The proposal for the Dairy – Revenue Protection insurance product also shows promise. DBMMC has been supportive of this new option and we are hopeful that its development will be authorized. 

Our farmer members appreciate the opportunity to be heard on issues and the policy solutions we believe are most important to the success of our nation’s dairy community. We look forward to working with you and your staff in the coming months to advance an effective and practical policy agenda for American agriculture. DBMMC thanks you for your time and consideration.

Regards,

John Pagel

President, Dairy Business Milk Marketing Cooperative

Pagel’s Ponderosa Dairy, Kewaunee, WI