Farm Bill proposals could benefit dairy farmers

AP

Cows graze on the farm of Bob and Karen Breneman on April 17 near Rio.

By Tim Damos, Capital Newspapers

Potential changes to the next federal Farm Bill would enhance safety net provisions for Wisconsin dairy farmers.

Although final details of the full bill are being hashed out, specifics of a program that reimburses farmers when milk prices fall have been finalized.

The program's payment rate has been slashed in recent years, and the new provisions would return it to its previous level of 45 percent. That means dairy farmers will collect more when prices fall and the program kicks in.

Milk prices have been high recently, but dairy farmers have been hit with about a 35 percent increase in production costs in the last two years. And it's always nice to have a safety net in place, said Donald Nelson of Neldell Farms LLC.

Nelson milks about 300 cows and has about 600 head, including heifers and young cattle, on his dairy farm east of Wisconsin Dells. He said costs for things like transportation, labor, machinery parts, seed and fertilizer have skyrocketed.

"Everything that we purchase — just about — has really gone up," Nelson said. "Especially fertilizer and seed."

The new provisions also include a "feed cost adjustment" that would trigger payments when feed prices are high, rather than only when milk prices bottom out.

Democratic Wisconsin Sen. Herb Kohl, who helped create the Milk Income Loss Contract (MILC) program in 2002, said the new adjustment is necessary.

"The feed cost adjuster is a way to acknowledge that rising costs and a shaky economy that have become real challenges for dairy farmers," he said in a news release.

But some have criticized the proposal, including U.S. Rep. Ron Kind, D-La Crosse, who has said if dairy farmers are compensated for high feed costs, other agricultural interests may start demanding the same benefit.

Interest groups, including the Wisconsin Federation of Cooperatives and Minnesota Association of Cooperatives, have backed the feed cost compensation provision.

"Even in times of high prices, producers need some protection from high feed costs that impact their bottom line," said Bill Oemichen, president and CEO of WFC and MAC.

The new MILC program provisions raise the cap on the poundage of milk producers can collect on in a given year, which will allow farms with about 165 cows to be covered vs. the 120 cows that can be fully covered now, Kohl's news release said.

Nelson said he'd like to see the cap raised a little higher. But he said keeping it lower will help target small to medium-sized farms.

The new provisions extend the MILC program for the next five years. Kohl said Wisconsin dairy farmers have benefited by more than $400 million since Congress implemented the program.

Democratic Wisconsin Sen. Russ Feingold is supportive of the changes.

"While I await the full details of the final Farm Bill, I am pleased the MILC provision will help ensure thousands of family farmers in Wisconsin will remain competitive as they face a changing economy," he said in a news release.