Milk swirl
March 22, 2017

IDFA CEO Calls for Better Dairy Risk Management

 |  By: Jim Dickrell

Michael Dykes, president and CEO of the International Dairy Foods Association (IDFA),  called for better risk management tools for both dairy farmers and processers in testimony today before the House Committee on Agriculture. 

“First and foremost, the dairy industry needs better mechanisms for risk management – and that’s on both the farm and processor side,” Dykes said. New and better tools are needed to protect against dairy commodity volatility, which has increased markedly in the last decade.

“Just as farmers are now looking to improve the Margin Protection Program and the Livestock Gross Margin insurance program, dairy manufactures also need access to effective risk management tools in this farm bill,” said Dykes.

“Forward contracting has provided an important mechanism for manufacturers to directly contract with individual farmers or their cooperatives at a fixed price to reduce price volatility. This program should now be expanded to include all classes of milk and be made permanent.”

Global trade is also crucial to both farmers and processors, he said. “Exports are driving growth in demand for U.S. farm milk,” said Dykes.  Access to Mexico is especially critical, since it is the number one export destination for U.S. dairy products, and accounts for one-fourth of U.S. dairy sales outside our borders.

“We need to ensure that a renegotiation of NAFTA preserves our important Mexico market and gains increased access to the Canadian market,” said Dykes.

The Asia-Pacific region is also becoming increasingly important, and is expected to double its consumption of food and dairy products over the next 35 years. “Reducing and eliminating tariffs and other restrictive agricultural policies in this region will allow our dairy industry to compete,” said Dykes.

You can read Dykes’ complete testimony here.