Edge member testifies before Congress on milk pricing

By Mykel Wedig, associate director of government affairs

Congressional hearings are an important part of the democratic process. They are held so lawmakers can hear from citizens about how legislation affects people, businesses and communities.

On Sept. 15, the Senate Agriculture Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security held a hearing titled “Milk Pricing: Areas for Improvement and Reform.”

The hearing was called to discuss the extreme market conditions of the last two years due to COVID-19 and the change to the Class I mover mechanism that exacerbated negative producer price differentials and created remarkable regional price differences.

“Milk pricing is rightfully considered one of the most complicated economic systems in our nation. When that system isn’t working for farmers, the ramifications reach from coast to coast,” said Sen. Kirsten Gillibrand of New York, chair of the subcommittee. She went on to say that we are in the midst of a dairy crisis that was made worse by the change to the Class I mover in the 2018 Farm Bill.

Edge member Christina Zuiderveen testified at the hearing. Zuiderveen is a managing partner of three dairy farms in Iowa and South Dakota and grew up on dairies in California and Michigan.

“The current federal order system is necessary and provides a safeguard against the market power of large milk buyers. But the system should be modernized to stimulate financial transparency and promote competition and innovation as opposed to consolidation among both processors and producers,” Zuiderveen said in her testimony. She said a committee of academics should do an in-depth analysis of the issue before any changes are made hastily.

Zuiderveen talked about how her farm fared well in the last year because they sell into the Class III market, but her family scattered throughout the country, and even neighbors down the road, were not so lucky.

Two other dairy farmers, from the Northeast and Southeast, also testified about how the current milk pricing regime has affected their farms. A second panel of dairy industry representatives included an economist, a representative from a dairy cooperative and a cheesemaker.

While the hearing focused on challenges in milk pricing, other issues were discussed. Supply chain problems that resulted from the pandemic were discussed extensively, as well as how the elimination of stepped-up basis and other tax changes could hurt dairy farmers. Zuiderveen, who has three young children, said it would be challenging for her kids to take over the family farm if such changes were made.

The differing ideologies of senators were apparent at times, but they agreed on one thing: the desire for full-fat milk in schools. Sen. Gillibrand said, “I think whole milk in schools would be wise. I know my children only drink whole milk.” Sen. Roger Marshall of Kansas, who practiced medicine before joining Congress, also touted the nutritional benefits of full-fat milk.

Edge is grateful that the subcommittee held a timely hearing on milk pricing and to have had the opportunity for one of our members to testify. A consensus on how to move forward with changes to the system was not reached, but it was made clear that more analysis needs to be done. Recognizing this need earlier this year, Edge and five other Upper Midwest dairy associations assembled a regional task force to do just that. Leaning on the expertise of Dr. Marin Bozic, a leading dairy economist, the group meets regularly with the goal of creating a lasting solution.

Edge will continue to be the “voice of milk” in the halls of Congress, in coalitions and in policy discussions to create conditions that help, not hinder, its members’ farms.

You can learn more about the milk pricing hearing and the task force’s work at voiceofmilk.com.