IDFA PR Release

International Dairy Foods Association (IDFA) has released a thinly disguised salvo over the bow of National Milk Producers Federation (NMPF)and its Foundation For The Future (FFTF).

http://www.prnewswire.com/news-releases/idfa-advocates-funding-for-usda-risk-management-insurance-program-119076749.html

Asks Ag Committee Chairs to Fund Program for Balance of 2011

Expresses opposition to so-called "Growth Management Programs"

WASHINGTON, April 1, 2011 /PRNewswire-USNewswire/ -- Connie Tipton, CEO of the International Dairy Foods Association, has called on Congress to maintain funding for a federal risk management insurance program for dairy farmers. In a letter to U.S. Sen. Debbie Stabenow (D-MI), chairwoman of the Senate Committee on Agriculture, and U.S. Sen. Pat Roberts (R-KS), ranking member of the committee, Tipton restated IDFA's opposition to any government program that would attempt to control milk price volatility, but affirmed support for the Livestock Gross Margin-Dairy program. Tipton pointed out the program's increased relevance, with more than 1400 contracts issued in FY 2011. Tipton cautioned that USDA has nearly reached its underwriting capacity for the program, and urged the senators to fund the program for the remainder of the year.

"Expanding this program is something that can be done now to help our nation's dairy farmers," wrote Tipton. "There is strong support among both producers and processors for the LGM-Dairy program. As it now stands, the program has insured about 2.4% of the U.S. milk production. Providing additional funding would make it available to more producers who may be just learning about the program for the first time."

The Livestock Gross Margin insurance policy provides protection against the loss of gross margin (market value of milk minus feed costs) on the milk produced from dairy cows. The LGM for Dairy Cattle insurance policy uses futures prices for corn, soybean meal, and milk to determine the expected gross margin and the actual gross margin. IDFA has consistently advocated for a safety net for dairy farmers, including margin insurance like that offered through the LGM-Dairy program.

"While we understand current budget pressures, we urge you to consider funding the LGM-Dairy program for the remainder of this year so that our nation's dairy farmers can be provided the tools available to others in production agriculture," Tipton wrote.

For more information on supply controls, and for the full content of the letter, please visit www.keepdairystrong.com.

NMPF, meanwhile is asking for people to sign on to its FFTF and they will let you know the details later

NMPF's Elevator Down

NMPF released a some news about its Foundations For the Future program on March 8, 2011. The headline reads:

"NMPF Board of Directors Approves Proposal to Improve Federal Milk Marketing Order System as Part of Foundation for the Future Program"

The first paragraph states:

The National Milk Producers Federation’s Board of Directors agreed today to support a series of major reforms in the Federal Milk Marketing Order program, intended to renovate the economic structure of the U.S. dairy sector. The changes will be packaged as part of the Foundation for the Future program that NMPF has been developing during the past 18 months.

"Renovation" by definition means an improvement. However,no one can say with a straight face the dairy farmer's situation will be improved by this plan. The details are sparse but...

http://www.futurefordairy.com/pdfs/NMPF-FFTF-Narrative.pdf

On page 22:

• Institute a new Class III price that would be a competitive pay price and no longer be maintained as a minimum price. The competitive pay price would be based on regional surveys of both regulated and unregulated proprietary cheese plants
processing a minimum of 500,000 pounds of milk a day and covering all varieties
of cheese

Scary. No minimum price?

Nice words though "competitive pay price." What a way to push buttons.

NMPF either does not understand economic organization or they hope no one else does.

FFTF

National Milk Producers Federation (NMPF) is pushing hard for its Foundations for the Future (FFTF) program. Colin Peterson is their guy in congress who will make this happen.

NMPF plans to have legislation introduced in the spring.

At this point, the plan seems to be an effort to make certain nothing significant happens. That is probably the exciting part to Peterson. There is no change is price discovery, the insurance program is really all it boils down to. With no change in the power of the CME, why should the "market" give a decent price. However, it is not likely the additional insurance coverage will be as cheap as man may think once the payment to farmers becomes habitual.

Many details are yet to be revealed like other programs roping in dairy farmers. But, Kozak is determined to move full speed ahead.

The sad part is there is an obligation for those at the top to do more. Maybe this is just a mirror image of those on the bottom thinking someone else should do something about their low milk checks. The con game flourishes on few details and much ignorance.