House Passes New Farm Bill, Including Dairy Price Stabilizers

The U.S. House has passed a new Farm Bill, which includes major reforms that aim to stabilize dairy prices.

There’s a program that currently compensates dairy producers when milk prices fall below a certain level. Under the new Farm Bill, that would be phased out. It’s being replaced by a new, voluntary insurance plan known as the “Margin Protection Program.” This acts as a safety net to help stabilize dairy prices.

UW-Madison Director of Dairy Policy Analysis Mark Stephenson says the program will help cut back on extreme high and low prices.“If you have the insurance, under those situations — whether feed prices are high or milk prices are low or some combination of those two things — then dairy producers would receive an indemnity payment for them.”

Republican Rep. Reid Ribble has been working on the Farm Bill for more than three years, and voted in favor of the bill. Following today’s passage, he says this element will have the greatest effect on Wisconsin. “That will help farmers manage risk and it works really well for dairy farmers of all sizes, which was something of concern to me,” Ribble said. “We couldn’t just favor the smaller farmer or the larger farmer: we had to look at Wisconsin’s dairy industry in its totality.”

But Democratic Rep. Ron Kind, who voted against the Farm Bill, is skeptical. He says he’s concerned that smaller, Midwestern dairy producers could be put at a competitive disadvantage.

The Senate takes up the bill later this week.