{"id":796,"date":"2020-01-05T13:27:59","date_gmt":"2020-01-05T20:27:59","guid":{"rendered":"https:\/\/agamerica.net\/?p=796"},"modified":"2020-01-27T12:23:40","modified_gmt":"2020-01-27T19:23:40","slug":"practical-solutions-for-fixing-the-dairy-crisis","status":"publish","type":"post","link":"https:\/\/msfagriculture.com\/2020\/01\/05\/practical-solutions-for-fixing-the-dairy-crisis\/","title":{"rendered":"Practical Solutions for Fixing the Dairy Crisis"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">Dairy farming in the US is going through a rough patch. There is too much production and not enough pricing support for investments. Several often repeated proposals have been suggested to address this crisis. While some of these solutions can help, it may be worth considering securing <\/span><a href=\"https:\/\/MSF Agriculture\/agriculture-loans\/\"><span style=\"font-weight: 400;\">USDA financing to cover costs<\/span><\/a><span style=\"font-weight: 400;\"> while adjustments are made to operations.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">The Dairy Crisis Can Be Fixed\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The dairy crisis is a complex problem that is growing in intensity. Small, local dairy farms are finding it increasingly difficult to compete with the larger dairies and are closing shop. Even large dairies find themselves faced with extra supply. Some of the proposed solutions include:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Regulation of dairy production via a cooperative<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">A small surcharge on daily products in case of overproduction<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Capping the growth rate, and setting a market access fee if the cap is exceeded<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Merely USDA financing would not do; creating a $20 per CWT price floor &amp; supply management<\/span><\/li>\n<li style=\"font-weight: 400;\"><span style=\"font-weight: 400;\">Creating an inventory management program for dairies and setting regional quotas<\/span><\/li>\n<\/ul>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Regulation of Milk Production: National Daily Cooperative Collaborative<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">The idea here is for regional production to match regional supply needs. Beyond that, production should be capped. Legal provisions should be built-in for punitive action against excess production. This proposal can be implemented almost immediately.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">5% to 10% Surcharge against Overproduction<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">This proposal calls for a $20 per CWT price floor as there is no overproduction. In the case of overproduction, there should be a fee of $10 per CWT. So long as we are trying to regulate overproduction from reaching the markets, we can build provisions within USDA financing for this to not be allowed.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Growth Rate On a Year-To-Year Basis &amp; Punitive Action<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In this proposal, the USDA would be tasked with announcing a growth cap close to 3% on a year-to-year basis every quarter. Producers can only expand production within that limit. If they overproduce, they must pay a market access fee. Previously, similar fees were $0.03\u2013$0.50 per CWT. However, research has found that this would allow the largest dairy farms to get bigger and bigger, meanwhile rewarding smaller dairies to keep working their production caps.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Implementing Supply Management Using a Price Floor<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">This proposal calls on the USDA to not merely provide <\/span><a href=\"https:\/\/www.fsa.usda.gov\/programs-and-services\/farm-loan-programs\/\"><span style=\"font-weight: 400;\">ag mortgages<\/span><\/a><span style=\"font-weight: 400;\">, but also buy milk products and help bring stability. There needs to be direct and guaranteed loans for animal feeding. There also needs to be a $20 per CWT price floor. All of this should build toward a federal milk pricing formula.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">Inventory Management Program &amp; Quotas<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This program establishes regional quotas for dairy production with a predetermined price. Local farmers are best positioned to come up with prices based upon local costs. Any milk that is overproduced may only be exported at low prices. Once again, the stress is upon reducing overproduction. USDA financing and other incentives can be built into the deal for &#8220;forcing&#8221; farmers to participate.<\/span><\/p>\n<p>&nbsp;<\/p>\n<h3><span style=\"font-weight: 400;\">Addressing Your Own Dairy Crisis<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">If you are finding you need a bit of help financing your own operations, <\/span><a href=\"https:\/\/MSF Agriculture\/contact-us\/\"><span style=\"font-weight: 400;\">talk to one of our expert loan officers<\/span><\/a><span style=\"font-weight: 400;\"> at AgAmerica. We\u2019d be happy to discuss USDA financing and other financing options available to help keep your farm up and running. Contact us today to see how we can help you.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Dairy farming in the US is going through a rough patch. There is too much production and not enough pricing support for investments. Several often repeated proposals have been suggested to address this crisis. While some of these solutions can help, it may be worth considering securing USDA financing to cover costs while adjustments are [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":797,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_et_pb_use_builder":"","_et_pb_old_content":"","_et_gb_content_width":"","footnotes":""},"categories":[3,6],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v22.5 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Practical Solutions for Fixing the Dairy Crisis - MSFAgriculture<\/title>\n<meta name=\"description\" content=\"While some of these solutions can help, it may be worth considering securing USDA financing to cover costs while adjustments are made to operations.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/msfagriculture.com\/2020\/01\/05\/practical-solutions-for-fixing-the-dairy-crisis\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Practical Solutions for Fixing the Dairy Crisis - 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