by Marion Nestle
Feb 4 2014

The dairy programs in the farm bill: A helpful analysis?

Thanks to the Hagstrom Report for sending along analyses of the dairy programs in the farm bill.

I’m not a dairy farmer and I’ve never had to work with these programs, which is a good thing because I find them impenetrable.  

For one thing, support for dairy farmers—and protection against disastrous cost and price fluctuations—is accomplished through several extraordinarily complicated programs that survive or are newly enacted in this farm bill.  

  • The permanent Dairy Price Support Program from the 1949 farm bill.
  • The Dairy Forward Pricing Program
  • The Dairy Indemnity Program
  • Export market development in the National Dairy Promotion and Research Program
  • The Margin Protection Program for Dairy Producers (MPP)
  • The Dairy Product Donation Program (DPDP)
  • Federal Milk Marketing Order for California

Why impenetrable?  Try this explanation (from the first document listed below) of the new Margin Protection Program:

A voluntary program that pays participating farmers an indemnity when a national benchmark for milk income over feed costs (the actual dairy production margin or ADPM) falls below an insured level that can vary over a $4 per cwt range.

That document explains the two new programs, MPP and DPDP, in great detail, with charts and formulas.  For them, I have to take the authors’ conclusions on faith:

The two new programs (MPP and DPDP) offer a total revamping of the safety nets that have been in place for the dairy sector going back to the middle of the 20th Century…Whether the programs proposed here will prove to be the answer farmers seek is something that will be debated and estimated, but we won’t really know unless and until they are tried.

Dairy farmer readers:  Will these new programs make your lives easier?  More secure?  Bring you more income?

Here are the analyses:




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  • Ginger

    Consumers, not taxpayers, should pay the production costs for dairy products. This is especially true in light of the very real health concerns raised by nutrition scientists. Readers who want a comprehensive and comprehensible summary of those concerns could start educating themselves by watching the documentary Forks Over Knives.

  • The US has had some big positives for farmers that have addressed some big negatives over the years. We ended slavery, made land widely available for relatively inexpensive purchase or for free, and, in the New Deal balanced farm prices for the benefit of both farmers and consumers. Since the new deal we reduced, then ended almost all nonsubsidy Market Management, and then, without these started writing checks to cover bout 1/8 of market failures (about 1/2 trillion in today’s dollars). In coming after all farmers starting in 1953, chicken farmers were hit hard early, Black cotton farmers faced double attacks, (racism & farm bill decline), hog farmers were devastated in escalating ways in the 1990s and it’s been dairy farmers, (again) since 1993, with only 1 year above full costs (by 2¢ per gallon). This shows what the new farm bill offers all farmers, including dairy. It’s a bill for the processors, enabling them to exploit farmers. Unfortunately, the bigger picture is often lost on the academics, who speak only in terms of recent “safety nets,” as if that’s what the original farm bills offered. They did not. Mostly dairy farmers get another round of massively subsidizing consumers, while being bashed by them.