Shover hoping Congress passes the farm bill
By Jean Caspers-Simmet
Date Modified: 11/28/2012 8:26 AM
DYERSVILLE, Iowa —Iowa dairy producers are doing better now that milk prices have come up, said Iowa State Dairy Association president Larry Shover, who has a dairy farm near Delhi.
"Here in Iowa we have some of our own feed supply compared to a number of other parts of the country," Shover said at the Iowa State Dairy Association regional policy drafting meeting in Dyersville. "The drought certainly affected the availability and price of hay, although the hay crop in Iowa was pretty good and the rest of our crops are coming out better than expected."
The opportunity cost — that producers could be selling $7 corn instead of feeding it to dairy cows — is going through people's minds, Shover said.
The milk price has risen sharply in recent weeks and cheese prices rebounded.
"We have not had as many sellouts as people were fearful of," Shover said.
The corn price won't always be $7, Shover said.
"There will be a year in the not too distant future when we won't be near $7, and then we'll be glad we have dairy cows to hedge bets," Shover said. "If dairy farms are well run, the cows add to most farmers' bottom line."
He hopes lenders stand by dairy customers and helps them to stay in business.
"Dairy is important to our culture and economy in the Midwest," Shover said.
When Congress adjourned for six weeks this fall without passing a farm bill, many people feared the legislation was dead, Shover said.
"But in the last week, I've heard of a couple indications that it will be taken up after the election," he said.
He thinks that the Dairy Security Act, which is a part of the Senate farm bill and the bill passed by the House ag committee, will bring to dairy a safety net like crop producers have with a margin payment if the price of feed skyrockets.
"We need something because the Milk Income Loss Contract program expired Sept. 30 and at this point we have no protection," Shover said. "We need something in place before we have another downturn in the market."
The Dairy Security Act isn't perfect, but it is an improvement over what was in place, Shover said.
"The Dairy Security Act considers the cost of inputs rather than just a low guaranteed price, which isn't applicable," Shover said. "MILC has been helpful, but it's not enough to bridge the gap."
If no farm bill is in place by the end of the year, the Agricultural Act of 1949 takes effect with the price of milk increasing to somewhere between $38 and $50 per hundredweight.
"That might cause shock in the system, and it would be better not to go there," Shover said. "We could all use that short infusion of cash, but it would disrupt the long-term viability of the industry."
The dairy portion of the farm bill is generally accepted by a broad majority of milk producers, Shover said. The point of contention in Congress relates to spending on food stamp and other programs designed for the poor.
Shover has heard concerns from non-farmers and producers about the new school hot lunch program and regulations mandating maximum calorie limits.
Whole milk is the best nutrition children can have, Shover said.
"There are benefits to milk fat that might fulfill children's appetites, and mandating only 1 percent white and chocolate skim milk is a bad regulation," Shover said. "This is a case where we need more state and local control, and we need to consider the whole picture. Obesity is a multi-faceted problem."