On testimony this week, producer Tom Barcellos advocated a margin program with a feed cost calculation and continued focus on immigration reform. Source: Western United Dairymen Weekly Update
â€œInput costs remain the most significant barrier to profitability that can be addressed in a farm bill,â€ Western United Dairymen President Tom Barcellos testified April 26 in a hearing before the House Subcommittee on Livestock, Dairy and Poultry.
The current farm bill expires Sept. 30, and Congress is in the midst of a contentious effort to write a new farm bill.
â€œFuel and energy costs continue to escalate, along with regulatory costs that impede our road to recovery as well,â€ Barcellos told the committee members.
The Dairy Security Act (DSA) is the focus of legislators in the House and Senate as they look to rewrite the dairy title. Barcellos, a California dairy producer, said he was â€œpleased to have it as the base of discussions going forward for the next generation safety net.â€
The proposal moves from a price-based model with volume-limited countercyclical payments to a plan based on margin insurance that is available to every farmer on 80% of their milk.
Barcellos offered his support for a change in the DSA that would recognize feed costs are different in the areas of the country where most of the feed is produced. â€œIt would be helpful for dairy farmers everywhere to have the option of choosing a market-based margin plan that values feed where it is used, rather than a production-based plan that prices it where it is grown.â€
Barcellos told the committee that with the DSA, dairy farmers have two options on a safety net: No program or one that uses a national feed cost calculation based upon where the feed is grown but where milk is not produced. WUD is proposing a third choice, which entails a margin program with a feed cost calculation using an average of the costs from 10 states with the highest milk production volume.
â€œWith budget constraints in mind, this program could be written so that premiums paid by farmers would cover the costs,â€ explained Barcellos.
Noting the Act has undergone several revisions over the last several weeks, including the elimination of legislative changes to milk marketing orders, Barcellos said, â€œThose changes are best handled by the regulatory agencies. California producers support the current industry practice of dairy farmers everywhere having the choice of how to be regulated or whether to be regulated at all.â€
Turning to the Conservation Title, Barcellos thanked the committee members for â€œmaintaining the integrityâ€ of the Environmental Quality Incentive Program.
Noting the critical importance of immigration reform, Barcellos said, â€œNothing we are talking about here today outweighs the need for agriculture to have access to a legal workforceâ€ and called on the members to â€œinclude a program that offers current experienced workers a chance to be here legally and to fill year-round jobs like those on dairies.â€