MN DAIRY – AN URGENT CALL TO ACTION

MN DAIRY SITUATION

Minnesota dairy farm families are struggling. In fact, Minnesota lost 10.2 percent of dairy farms in the last year due to several factors, including:

• Four consecutive years of terrible economic conditions
• Trade restrictions related to dairy
• Shifting consumer trends
• Unfair treatment of Midwest dairy producers by the federal dairy program
• Competition from states that are more favorable to dairy

Minnesota dairy farmers are no stranger to hard work; in fact, they embrace it rain or shine, 365 days a year. There are no days off when it comes to caring for dairy cows, the youngstock or their land!

Dairy farmers are skilled in managing through tough economic cycles, but the current situation is much worse and justifies some assistance from the state if we want to preserve this important economic sector in Minnesota.

A MODEST PROPOSAL

Responding to the crisis facing Minnesota dairy farm families, the Minnesota Milk Producers Association (Minnesota Milk) is proposing a reasonable three-point plan to help mitigate the severe economic challenges facing our dairy farmers.

1. Tax Conformity. (HF 1417/SF 1967) – Passing this 199A tax conformity provision will provide dairy farmers with long-term tax relief when they sell to cooperatives. Section 199A was modified in March 2018 and therefore was not included in tax discussions last year. Cooperatives have the option of keeping the deduction or sending it on to their patron-owner-farmers depending on the economic state of the industry.
2.  Dairy Margin Insurance Rebates. (HF 1418/SF 1698) – This proposal creates state rebates for eligible dairy farmers enrolled in the federal dairy margin coverage program. Managed by the Minnesota Dept. of Ag, eligible dairy farmers will receive 30 cents per hundredweight of milk up to the first 5,000,000 pounds of milk enrolled in the federal program.
3. Conservation Assistance. (HF 1419/SF 1699) – Dairy farms that adopt conservation stewardship practices as defined by the Commissioner of Agriculture will be eligible for state conservation payments to support the costs of becoming a more sustainable farm. The plan has three tiers of conservation payments with larger payouts weighted in favor of smaller dairy producers.

These measures will have a positive impact for our dairy farmers at a crucial moment, which is why Minnesota Milk respectfully requests the support of Governor Walz and the Minnesota House and Senate to ensure passage and final adoption of these measures prior to the adjournment of the 2019 legislative session.

Minnesota dairy farmers and the local businesses they support are depending on much needed relief this year. Minnesota loses if we lose another 10 percent of dairy farmers – the time to act is now.

MINNESOTA BENEFITS

Minnesota has been a top dairy producing state for decades. The economic benefits of a strong dairy industry stretch beyond rural communities as several companies and thousands of Twin Cities jobs are also dependent on our dairy sector. When dairy succeeds, Minnesota wins.

There are several good reasons to support the Minnesota Milk Dairy Plan including:

• The dairy sector is still significant and helps diversify the farm economy in Minnesota and the communities that depend on farming
• Dairy generates a strong value-add component to Minnesota’s economy because the processing of raw milk into dairy products generally occurs close to production
• Dairy farming is labor-intense, and many dairy farmers create jobs for area residents to support their dairy operation
• The current “down cycle” in dairy is unique and critical. The severity of current dairy farm conditions begs for a unique response by the state.

Minnesota dairy farmers have persevered through several economic cycles in the past, but the situation has never been this dire. Please respond to this urgent call to action and vote to preserve and protect Minnesota’s dairy farm families.