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August 25, 2016

Northeast Lawmakers Say Cheese Buyout Isn’t Enough

 |  By: Anna-Lisa Laca

Earlier this week, USDA announced buying $20 million of cheese in an effort to bolster prices for America’s dairy farmers. The buyout was in response to a bipartisan group of lawmakers requesting USDA provide support for producers beyond the Margin Protection Program. Still, not all lawmakers think this week’s announcement is sufficient.

“While I appreciate USDA’s quick response to our urgent request for assistance for our dairy farmers, it is clear that this modest first step does not go far enough to make a substantial difference on the ground,” Congressman Joe Courtney (D-Conn.) said in a statement Tuesday. “I will continue to work with my colleagues to find long-term, comprehensive solutions to lift up our nation’s struggling dairy industry.” 

Likewise, some of Courtney’s neighbors are also underwhelmed by USDA’s help. In a joint statement Vermont Senators Leahy, Sanders and Welch expressed their intent to get more support for Vermont farmers.

“Secretary Vilsack’s announcement that the USDA will purchase $20 million in commodity cheese products in support of nutrition programs nationwide is welcome news,” they said. “These are small steps, but any steps to stabilize dairy prices will help. This action also helps address the great need for access to nutritious dairy products facing struggling families in households across the nation. We have heard from dairy farmers in Vermont facing the pressure of declining milk prices, and we will continue to fight for additional steps by USDA to support dairy farmers.”

Comments

It is not the responsibility of the USDA or government to bail out those dairymen who do not use some form of risk management. Dairymen in the US have a variety of methods they can use to manage their risk whether it be through a program, futures price hedging, using options and etc. They can also manage their inputs through pricing at their feed supplier. Their is no excuse for an individual who chooses not to participate in any risk management. The excuse they do not know anything about hedging or options is ludicrous, you can call up a broker and they will explain in detail how they work. You can choose attend classes. Buy a book and read about it. Lastly, there is this vast information source readily available to most individuals called the internet.

I am a dairyman and chose to educate myself on everything listed above and take steps to manage risk. Those dairymen who choose not to partake in any risk management know they are completely open to the market. There is a lot of downside risk and upside risk being open. Who is going to bail me out if I lock prices in at $17/cwt and then they go up to $20/cwt? Who is going to be there to help me get that money I missed out on? No one, thats who. My point is, why should dairymen who continue to choose not to use any risk management tools be rewarded? They shouldnt be rewarded at all. In my opinion they are getting what they deserve, they know full well there is a lot of downside risk and upside risk when they choose not to use any risk management tools. Its this word called ACCOUNTABLE that nobody seems to be anymore. Whomever its is or whatever business it is, they need to hold themselves accountable and be held accountable for the decisions they have made.
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