The 2007 fiscal year budget proposal released this week by the White House includes major areas of concern for dairy farmers and agriculture in general, says the dairy farmer leadership of Dairy Farmers of America Inc.

"If the package was voted on today, dairy farmers and farmers across commodity groups would be in serious trouble," says Tom Camerlo, a dairy farmer from Florence, Colo., and chairman of DFA's board of directors. "The reality is the proposal has already met significant public opposition from Congressional members. While it is far from final, this proposal does, indeed, set the tone for farmers as we face the drafting of the 2007 farm bill."

The proposed budget unfairly targets agriculture for much greater cuts on the order of 5 percent as compared to agriculture's much smaller share of overall government expenditures of 1 percent.

Of major concern to DFA's dairy farmer members is the proposal to reduce the value of the price support program through price support "tilt" adjustments. Further adjustments to the price support "tilt" will reduce support to dairy farmers by significantly more than the 5 percent cut called for in other commodity payments.

Also "very troubling" is the Administration's proposed three cent per hundredweight "tax" on all milk production. Camerlo points out that such a "tax" would come at a time when dairy farmers are already burdened by high fuel, utility, and feed costs.

"Dairy farmers, not the U.S. government, have voluntarily financed and implemented the Cooperatives Working Together (CWT) supply management program," says Camerlo. "Since 2003, U.S. dairy farmers have contributed more than $213 million to reduce milk supplies by nearly 3 billion pounds through herd retirement programs, a reduced production-marketing program, and enhanced exports."

In addition, there are a number of commodity support programs at stake which are of interest to dairy farmers. Payments to farmers from all commodity programs including marketing loans, direct and counter cyclical payment, and the Milk Income Loss Compensation (MILC) program would face 5 percent cuts under this proposal.

"The budget will be reviewed and modified by both the House and Senate in the coming months," says Camerlo. "Dairy farmers and their cooperatives must work together to address the issues and challenges ahead."

SOURCE: Dairy Farmers of America via Dairy Herd Management.