Looks like we could use a few less Dairy Farmers.... Or do you support the Welfare program where the gov't buys milk to prop up the Industry and then gives the Milk to other countries as foreign aid and school kids?
<BLOCKQUOTE>quote:</font><HR>Congressional policy creates mountains of surplus milk
Knight Ridder News
WASHINGTON – Got milk? Uncle Sam sure does.
In caves and giant warehouses, the U.S. government is storing mountains of powdered milk that taxpayers were required to buy, even though nobody is sure what to do with it all.
The dry-milk stockpile has hit a record 1.28 billion pounds, and it’s still growing – a side effect of U.S. dairy policies that critics say encourage overproduction of milk, increase taxpayer costs and force a reluctant U.S. Department of Agriculture to buy powdered milk to bolster dairy prices.
“We don’t want it,” said Bill March, a USDA official involved in the program. “We try very hard to minimize the intake of surplus commodities.”
Reducing the surplus
But as powdered milk piles up, the USDA is scrambling to reduce the surplus. The department has offered it to school lunch programs and food banks, for foreign aid programs and for feeding postwar Iraq. It even shipped more than 200 million pounds out west, for drought-stricken ranchers to feed to cattle.
And yet, “It’s like a treadmill – they can only keep up with where they are, but they’re not really cutting into the storage,” said Don Ault, a dairy specialist at Sparks Cos. in Minnesota. “With a billion pounds, that’s a huge amount of powdered milk stocks, and it’s extremely difficult to get rid of” without also destroying the powdered milk businesses in America.
For dairy farmers in the Upper Midwest, the situation is a double frustration. First, because it underscores how low milk prices have fallen. But also, the milk surplus is occurring mostly on the West Coast, not in the Midwest, although dairy farmers nationwide feel the effect.
“In the Midwest, we’re not overproducing. In fact we’re short of milk here,” said Sue Beitlich, a dairy farmer south of LaCrosse, Wis. She added, “For two years, we have been experiencing 1978 prices, and we have 2003 expenses. Can you imagine if your paycheck reflected what you earned in 1978, but you were living in today’s economy?”
Minnesota’s dairy industry contributes $8 billion to the state’s economy, and ranks sixth nationally in milk production. Wisconsin, dubbed America’s Dairyland, stands at No. 2 in milk production, thanks to 1.2 million cows.
Officials from both states have stressed the importance of keeping milk production robust in the Upper Midwest if the region’s dairy processors are to thrive.
Nationally, however, the swelling size of the milk stockpile is an embarrassment to U.S. agriculture boosters, including some members of Congress. That’s partly because of the cost: Every pound of nonfat dry milk in storage cost taxpayers 80 cents, so it’s a $1 billion mountain. And that doesn’t count storage costs, from renting space in caves around Kansas City to leasing warehouses around the nation.
‘Powdered-milk mountain’
A mountain of government-surplus food provides a juicy target for critics. During the Reagan administration, a glut of surplus government cheese became a national punch line – a surplus produced by the very program that has produced today’s powdered milk mountain.
“Same program – nothing’s changed,” said the USDA’s March, branch chief in the domestic procurement and donation division.
March explains how the program functions: “It is congressional statute that we have a dairy price support program, and the intention is to support milk prices at the current rate of $9.90 a hundredweight. When milk falls (below that price) to a certain level, we have to buy what is offered by industry.”
Lately, prices are low enough to send USDA buying, at least on the West Coast. A week ago it bought $7.6 million of powdered milk, bringing its 10-month shopping list to $575 million.
That intervention has kept milk prices from falling below $9.90 per hundred pounds. But to the critics of government farm subsidies, it’s yet another example of Washington policymakers sending crossed and conflicting signals.
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