PNT staff writer
The Dairy Farmers of America (DFA) hosted the Dairyman’s lunch at the New Mexico Ag Expo on Wednesday with more than 50 dairy farmers in attendance.
Lunch was served to the dairymen as Peter Vitaliano, vice president of economic policy and market research of National Milk Producers Federation, gave presentation on the 2014 Farm Bill and how it would affect the dairy industry.
Vitaliano went over some of the new programs that are replacing existing dairy programs.
One was the Dairy Production Market Protection Program (DPMPP) which is a voluntary insurance program that protects producer margins equal to the difference between the all-milk price and a national feed cost.
“This program, when it is up and running, will be very helpful,” Vitaliano said.
The program will help offset low margins which are caused by low milk prices or high input costs.
He said it was a free program with a basic level of protection with is a $4 minimum margin. All milk producers regardless of size will have lower premium rates on the first four million pounds of milk production insured. This program creates a disincentive to produce excess milk as only the first four million pounds are insured.
Another program Vitaliano discussed was the Dairy Market Stabilization Program (DMSP) which is tied in with the DPMPP. The DMSP acts as a early warning system to the producers in DPMPP when imbalances in the marketplace negatively effect dairy farmer margins.
These programs replace the Dairy Product Price Support Program (DPPSP) and the Milk Income Loss Contract Program (MILC).
“These programs will bring change to the industry and will be an enormous tool for dairy producers,” Vitaliano said.
Vitaliano said there will not be a milk shortage, but it will be tight in the future and a lot of countries cannot meet the demand, so they will look to the U.S. and the dairy industry must be ready for it.
“The U.S. dairy industry has a good future,” Vitaliano said.