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PDPW speakers roll back the calendar for passage of federal farm legislation

Oct. 25, 2012 | 0 comments

Don't expect quick action on a Farm Bill by Congress and don't base any dairy farm management decisions on what the provisions of new legislation might be.

That was the advice from agricultural economists David Kohl of Virginia Tech University and Allan Gray of Purdue University to members of the Professional Dairy Producers of Wisconsin at the organization's business and financial decision-making conference.

As to when Congress might act on a new Farm Bill, Gray said he'd "be shocked" if it would happen by March of 2013. Based on the timetable for previous Farm Bills, he predicted that September of 2013 might be when something happens.

In that legislation, Gray expects there'll be a lot of emphasis on what the appropriate level of federal spending should be on crop insurance.

He said he's not sure what the dairy provisions in a new bill will be but he does not believe there will be a milk supply management provision for the dairy sector. The government is not likely to assume a stance of blocking innovation in the dairy industry, Gray remarked.

"Manage your business as if there were no Farm Bill," Kohl advised.

On the supply management question, he suggested looking at Canada, which he described as being in the 1960s as a dairy sector. If supply management were implemented on milk production in this country, Kohl believes a major effect would be a slowing of the consolidation in the dairy industry.

Related Topics

Kohl and Gray also invited conference attendees to pose questions, concerns, and ideas about related topics pertaining to the agriculture and dairy sectors.

Among the responses were the outlook on land prices and rents and preserving dairy product market share as the retail price level of those foods increases.

Other areas are if an appeal to health and nutrition would help protect or increase dairy product sales, and what vehicle(s) for delivering that message might be effective.

Other concerns cited by the attendees were the possibilities of economic inflation and deflation, the rising costs of feed and labor, and continued price volatility in the dairy sector.

In addition, there is the choice between risk management and margin protection in pending dairy legislation, and consumer perceptions as the connection between food producer and consumer becomes ever more distant.

Opportunities listed for an optimistic outlook in the dairy sector included the increasing demand for animal proteins and the role of technological improvements.

In addition, other opportunities could be the possibility of diversification of production and revenue streams on dairy farms, and the place of the United States in the global dairy sector in the coming decade.

Reacting to a couple of those points, Kohl described how the two modest-sized dairy farms he's involved with in the Roanoke area in western Virginia have set up an on-farm creamery for the production of yogurt and egg nog, the bottling of fluid milk for sale in supermarkets, and direct delivery to 1,200 households.

At a recent open house at the Homestead Creamery, in which he is an owning partner, the approximately 6,000 attendees were provided with a choice of 18 different activities, Kohl reported.

He said conversations with many of the attendees revealed that they were interested in dairy products for the sake of the health of their children.

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