The US government’s moves to extend financial aid to dairy farmers will do little to address the long-term issues facing the sector, according to a leading industry body.
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The International Dairy Foods Association (IDFA) suggested that the Dairy Product Price Support Program (DPPSP) fails to address the structural issues facing the industry.
“We recognise that Secretary Vilsack is responding to the current difficulties faced by many farmers, but everyone should be concerned that we will be right back here in a few years unless we review and update existing dairy policies,” said Connie Tipton, president and CEO of the IDFA.
According to the IDFA, the current low dairy prices are due to the economic downturn, a decline in global demand for dairy products and an increasing milk supply.
The association has also suggested that current US dairy policies “discourage innovation in dairy manufacturing”.
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By GlobalData“Our members are concerned that an increase in government purchases of products, such as nonfat dry milk, does very little to expand the demand for nutritious dairy products, which is how our industry can grow,” said Tipton.
IDFA insisted that product innovation and increased global demand are fundamental parts of any solution designed to address the economic conditions facing the US dairy industry.
Agriculture Secretary Tom Vilsack has estimated that the DPPSP would increase farmers’ revenues by US$243m between August and October, when the price hike will be in effect.
Elsewhere, the extension to the aid has been welcomed. “Every initiative we can successfully implement to bolster milk prices makes a vital difference to the dairy farmers who are fighting hard to maintain their livelihoods,” John Wilson, Dairy Farmers of America senior vice president, said.
“We have been active supporters of increasing dairy commodity prices under the Dairy Product Price Support Program, and believe it is an important next step in the broader effort to reverse the current dairy crisis,” he added.
National Milk Producers Federation president and CEO Jerry Kozak echoed this sentiment.
“This step by USDA to raise farm-level milk prices comes at a critical time, and is yet another important effort the agency has made to help dairy farmers survive the worst recession in their lifetimes,” he said.
