By Jean Caspers-Simmet
simmet@agrinews.com
DES MOINES — Sen. David Johnson, ranking Republican on the Iowa Senate Agriculture Committee, works on a dairy farm near Ocheyedan.
"Low milk prices are a problem across the country, and dairy operations are really stressed," Johnson said. "Not that long ago, prices were touching on $20 per hundredweight. More recently the bottom fell out, and milk was down to $9. Dairy farmers are reacting and trying to find any way to trim costs. That’s hard to do when inputs continue to rise."
Johnson said the national recession has had an effect on consumer buying. Families are eating out less because they have to cut home budgets.
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Johnson has several proposals to help the dairy industry, but the timing wasn’t right to introduce those bills this year. One would provide tax incentives to dairy operations that expand or maintain their facilities and equipment. He’d also like to create a health cooperative for farmers. Additionally, he wants tax incentives to help milk processors modernize or expand. Similar measures have been successful in Wisconsin.
"Because of market conditions right now, the timing isn’t right for legislation designed to spur an increase in the number cows," Johnson said. "I’ll consider it next year."
Dairy is the most revenue generating livestock operation in the state, Johnson said.
"Inputs are generally local, and that means more people employed," Johnson said. "If costs are too high and market conditions are not right, its hard on everyone."
U.S. Sen. Charles Grassley, an Iowa Republican, said that demonstrating lets consumers know that prices are low.
"Consumers sure knew when prices were high and ethanol was being blamed for it a year ago," Grassley said. "When farmers are losing money hand over fist, as dairy farmers are right now, the consumer ought to know it to put pressure on their local supermarket and grocery manufacturer to get the cost down."
Grassley said that the 2008 farm bill added a feed cost adjuster to the Milk Income Loss Contract Program and that should help dairy farmers as should the USDA purchase of 200 million pounds of non-fat dry milk.
