Today's Question: What can be done to save the dairy industry?

Friday, August 14, 2009 | 3:40 p.m. CDT

COLUMBIA — Dairy farms across the country are struggling to keep up with falling milk prices and rising costs of production. The turbulent nature of this industry has almost become an accepted norm: Farmers enjoying a period of expansion, keeping up with a global demand for milk, followed by an abrupt interval of stagnation where they try to shrink down to offset a surplus of milk. 

The federal government provides several assistance programs, such as the Milk Income Loss Contract payments, which are given to dairy farmers when prices drop below a certain value but only cover up to a certain production level.

Farming on a deficit and government support should not be considered business as usual, some dairy farmers say. Although such programs have saved numerous dairy farms from closing, they alone cannot solve the ailing industry as a whole. "It has to be a combination of things," said Joe Horner, dairy and beef economist for MU's Commercial Agriculture Program. By letting dairy farms fail, consumers face the danger of having limited sources for their food, as well as a decreased chance that it will be grown locally.

American dairy farmers also have problems competing on the global market, specifically when it comes to one milk product, milk protein concentrate. MPC is an ultra-filtered, dry milk powder that's used in a variety of processed foods for its high-protein qualities.

There is legislation in Congress that aims to place tariffs on imported MPC in order to promote the American dairy farmers who can then compete with the international products.

What can be done to save the dairy industry?


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