The Dairy Safety Net Debate Part III: The Compromise Dairy Safety Net Solution

In our previous farmdoc daily posts "The Dairy Safety Net Debate of 2013: Parts I and II", we offered an independent analysis of the dairy margin protection programs put forth and passed by the U.S. House of Representatives and the U.S. Senate. This research demonstrated that a safety net program encompassing both the milk price and the feed price in the form of an income-over-feed-cost margin would succeed in providing need financial relief to dairy farmers during times of low milk production margins. We also identified and discussed three significant issues: (i) adverse gaming, (ii) functional equity of dairy market stabilization, (iii) and the distribution of program benefits.
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