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Drought Stirs More "Supply Management" Controversy

The International Dairy Foods Association says a proposed government program to alter milk supply, were it in effect now, would further limit short milk supplies in the face of this summer's drought.

The proposed program, which is included in the 2012 Farm Bill, is called the Dairy Market Stabilization Program or "supply management." If the Farm Bill were in effect, the program would have required participating farmers to periodically limit their milk output when poor conditions arise to allow for price recovery.

However, DMSP and its partner legislation, a subsidized revenue insurance program, is currently just legislation waiting to be passed.

"Not only will consumers be facing higher prices in the near future, because cows produce less milk during high heat conditions, and the cost of feed will be higher, but this new program would have already dug the hole deeper," she said.

IDFA Senior Vice President Jerry Slominski backed up Tipton's statements. "This is an excellent example of why it doesn't make any sense for Congress to attempt to manage the supply of milk," he said. "The weather changes faster than government can change its rules and regulations, and this will cause prices to swing more wildly once the impacts of the drought are felt by the industry."