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  March 15, 2010

By Sherry Bunting, Special for Farmshine

HARRISBURG, Pa.—U.S. Representative Kathy Dahlkemper (D-Pa.) was in Harrisburg talking dairy policy with Dennis Wolff and the Dairy Policy Action Coalition (DPAC) at the offices of Versant Strategies here Monday, March 15.

Dahlkemper represents Pennsylvania’s third district, which stretches from just east of Butler up into Erie and Warren counties. She is the first in 32 years to represent her district on the U.S. House Agriculture Committee, and she is one of three in Pennsylvania’s congressional delegation who currently serves on that committee. The other two are Rep. Glenn Thompson and Rep. Tim Holden (vice-chair).

Having a background as a dietician and exposure to agriculture throughout her district, Dahlkemper has made farming one of her primary focuses because of its importance to the local economies within her district. Last October, she hosted a Butler County dairy solutions forum, which was one of seven separately organized grassroots dairy producer meetings throughout Pennsylvania and eastern Ohio from which dairy farmers came together to eventually form DPAC last November.

Cliff Hawbaker, dairy producer and chairman of DPAC, had the opportunity to sit down with Wolff and Dahlkemper Monday to talk about dairy policy ahead of the upcoming Farm Bill hearings, the first of which is slated for April 20 in Harrisburg.

Willard Lemaster, director of the Pa. Center for Beef Excellence also had the opportunity to discuss with Rep. Dahlkemper the issues that face beef producers—as well as dairy and livestock producers—such as animal rights and export trade.

Pennsylvania is home to 1.6 million total cattle (dairy and beef animals). The state has just under 8,000 dairy farms averaging 65 adult milk cows, and as many calves, per farm and 28,000 beef producers averaging 20 mama cows or 50 feedlot steers per farm.

Rep. Dahlkemper was quite aware of the reach the dairy and beef sectors have into local economies in terms of allied small businesses, revenue, and jobs. She, in fact, also sits on the U.S. House Small Business Committee.

Hawbaker and Wolff talked with her about DPAC’s very specific push for implementation of electronic reporting as already authorized in section 1510 of the 2007 Farm Bill’s dairy title.

“This is important because the USDA NASS report is now on a weekly basis, and by the time it comes out this Friday, it will be based on prices collected Wednesday for transactions that occurred last week,” Wolff said, adding that corn and soybean growers and even other livestock sectors of agriculture can look daily—even hourly—at what their market is doing. Furthermore, the NASS Product Price Survey is then plugged into the USDA milk pricing formulas to set minimum prices for the four classes of milk. Dairy producers are forced to deal with lag times and a thinly traded cheese market on the Chicago Mercantile Exchange (CME), which, in effect, sets their milk price, even the base price on fluid Class I.

“Pennsylvania was instrumental in getting this electronic reporting language put into the 2007 Farm Bill. It basically authorizes electronic reporting of  negotiated trades, to report transactions more frequently and subject to quarterly audits,” Wolff explained to the congresswoman, who was keen to help. “DPAC is pushing to get this implemented, and we are working with anyone in Washington who will listen. Senator Arlen Specter’s office and Rep. Tim Holden’s office are taking the lead, but the first thing they need is to get a price tag from USDA on what it will cost to implement.”

DPAC is now working with the congressional delegation to put pressure on USDA “just to open the door. We don’t know if this will cost $2 million or $20 million,” said Wolff. “We are grateful for what Congress did in terms of the $350 million in emergency aid late last year, but that was just a small amount to most dairy producers, when we could spend a fraction of that to deal with these long term market issues.”

Hawbaker also stressed the point that electronic reporting—which could be expanded in the next Farm Bill to include more dairy products—is one key area of 100% agreement among all dairy farmers. “We’re united on this. The CME (as a market indicator based on spot block cheddar prices) is broken. There’s really no disagreement on that point.”

He also shared results of DPAC’s dairy producer survey, which garnered responses from dairymen in 23 states. “Eliminating, or at least diluting, the influence of the CME on our milk price is one key thing we have a lot of agreement on, whether you’re a dairy farmer from Pennsylvania, or from Vermont, or the Southeast or even the West and Midwest. Electronic reporting would begin to dilute the influence of that broken system.”

It would give traders in the milk futures and all sectors of the cash market another place to look for information on what is really happening on a daily basis in dairy product transactions, Wolff explained.

“The dairy industry really needs this,” he said.

“It’s the cornerstone of fixing the problems with the system,” added Hawbaker.

Another area of widespread agreement among dairy producers is to eliminate the dairy product price supports that result in government purchases of powder and butter.

“It’s the combination of this sort of ‘guaranteed buyer’ along with the ‘make allowances’ that are embedded in the milk pricing formulas that keep the industry from being innovative and producing products the market wants,” said Wolff.

“We don’t get the right signals. Expansion in the manufacturing sector is based on what can be sold to the government, and when the price falls and the government support price is triggered, they just move that inventory out of their warehouse into the government’s warehouse, but it still hangs over us as inventory,” Hawbaker added.

Wolff and Hawbaker shared with Rep. Dahlkemper the draft summary of DPAC’s March 11 milk pricing workshop and board meeting.

“One of the things that has been frustrating to us in Congress is that the dairy industry has not come together with one voice,” Dahlkemper related. “It looks like this is beginning to happen.”

Dahlkemper expressed her concern about preserving the consumers’ ability to buy local. “We have to be concerned about strong agriculture here, as well as food imports, food safety and nutrition,” she said. “What we do in agriculture policy affects our food supply going forward.”

With nutrition programs like the School Lunch Program and Women, Infants and Children (WIC) being the largest part of USDA’s budget, Rep. Dahlkemper’s background as a dietician and her interest in agriculture are important as she travels through her district hearing the issues, like dairy policy. She has also been involved in health and wellness issues.

She even helped get milk into the Longworth Cafeteria in Washington. “They had a cafeteria special for a sandwich, side and soda,” said Dahlkemper. “I emailed them and asked them why milk isn’t on that special as a beverage choice… now it is.”

 
     
 
 
 

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