WASHINGTON (Oct. 28, 2011) – National Farmers Union sent a letter to leaders on the U.S. House of Representatives and Senate Agriculture Committees urging them to continue working to reform dairy policy in the farm bill as part of the Joint Select Committee on Deficit Reduction (Super Committee) process. The Dairy Security Act of 2011 (DSA) could lead to further vertical integration of the dairy industry if additional steps are not taken.
“The DSA, in its most recent form, will likely encourage the use of forward contracts,” said NFU President Roger Johnson. “For many years, NFU has opposed the increased use of forward contracting for dairy producers. Similar to the consolidation and vertical integration that has occurred in the poultry and swine sectors, the DSA could lead to increased forward contracting by dairy processors will only serve to transform the American dairy industry at a heavy cost to farmers and rural communities.”
The DSA currently has no program for farmers who opt out of the insurance program, which would likely lead to further vertical integration of the dairy industry.
“Without a program that will help smaller dairy producers, the use of forward contracting should be prohibited in order to prevent the consolidation and vertical integration of the dairy industry,” said Johnson. “The DSA must include a program that could provide protection to dairy farmers if prices fall too low. This is especially helpful for family dairies, to ensure that they are able to continue producing during difficult times.”