Reviewing US dairy supply management efforts

Farm Bureau grassroots leaders debated this issue in 2019 and ultimately decided to oppose a mandatory quota system with the willingness to consider a flexible supply management system that is administered through the marketplace and not through the federal government, i.e., milk processors and cooperatives alongside individual dairy farmers. Milk supply management programs, which provide incentives or penalties to limit perceived over-production, have been used previously in the U.S. with mixed results. These programs included a USDA-administered milk diversion program, government-administered and industry-funded herd buyout programs, and base-excess plans, i.e., two-tiered pricing. In addition, a milk supply management program was heavily debated during the 2014 farm bill. Today’s Market Intel article reviews these previous attempts to manage the U.S. milk supply.