Testimony of Eric Ooms

Before the House Agriculture Subcommittee on Livestock, Dairy and
Poultry

Longworth House Office Building, Room 1300

Washington, D.C. 20515

April 24, 2007

My name is Eric Ooms. My father, two brothers and I own and operate a
400-cow dairy farm in Chatham, New York. We also grow approximately 1800
acres of corn, alfalfa and grass for our own herd and sell some to
neighboring farms as well. Our family has been in the dairy business in
our area since 1952, when my father and his family emigrated here from
the Netherlands.

I serve on the New York Farm Bureau Board of Directors and also as the
Chairman of the New York Farm Bureau Dairy Committee. Our farm has been
a member of Agrimark and it's predecessor cooperatives since we
installed a bulk tank in 1956. Our cooperative owns Cabot and McCadam
cheeses.

As a dairy farmer, I would be remiss if I did not emphasize the
importance of the MILC program and how important it is to have it
extended in the Farm Bill and returned to the 45% rate that it started
at in 2001. I realize that it not the charge of this hearing, but I had
to mention it.

With the recent negative price/cost paradigm that the dairy industry has
endured, many farmers are calling for closer scrutiny or elimination of
the Federal Orders. While I do not have any objection to reviewing the
Orders to assess whether the current patchwork structure with so many
unregulated and state regulated areas is practical, to eliminate them at
this point may be shortsighted. It is important to remember that the
Orders exist in large part to facilitate the movement of milk within a
region, not necessarily ensure a fair price to my farm or any other farm
for that matter.

The first thing that comes to mind is the urgent need to amend the
Federal Order system in such a way that it will be more responsive to
changes in the market place. With the recent high energy prices there
were several calls for USDA to review and adjust the make allowance for
cheese.

Several cooperatives asked for an emergency hearing on this issue as
early as March 2005. It took until November 2005 to agree to hold the
hearing, which was held in January 2006. Based on the testimony
presented in January, the department decided to have a follow-up
emergency hearing in September 2006, by November 2006 a decision was
reached and despite an unsuccessful lawsuit, the new rule was
implemented in February 2007. That is two years to commence and act on
emergency hearing! I can only guess that if there were a call for a
hearing that was not seen as an emergency, the department would still be
gathering the facts about what the Wright brothers have been up to in
Kitty Hawk, North Carolina. Regardless of what one thinks about the need
for the changes that were made, this process should be able to be
completed 6 months or less.

While this was going on, California, which has a state order, dealt with
the exact same issue and the process took less than five months (someone
mentioned to me, that they thought that it would have been done in less
than four months, but they delayed in hopes that the Federal Order
process would be done quicker). As a producer, it would be easy to
think, why can't we in the Northeast simply opt out of the Federal Order
and do it that way, but when you realize the number of states that we
are dealing with in our milk shed, it is not quite that simple.

It would also be a good idea to include the ability for the Federal
Orders to have the authority to add in a fuel price adjustment mechanism
that can be paid by handlers. As it currently stands, when our haulers
need more money to haul milk (and no one can doubt that these costs are
legitimate) it always falls on the back of the farmers, there has to be
a practical way to push this cost to a place where it is not 100% on the
backs of farmers.

With the recent low milk prices, there has been a great deal of concern
about whether our cooperative system is working for us. Let me state
clearly, I feel that the answer to dairy farmers' problems can be
cooperatives, so I would implore all of you to retain or strengthen
Capper-Volstead. This does not mean that there does not ever need to be
oversight of cooperatives or that being certain that cooperatives are
doing an adequate job of educating their members as to what is happening
within an industry. One tool to keep informed, in addition to what I
receive from my cooperative is the monthly newsletter that Federal Milk
Market Administrator sends each farm (this can be found online at
[www.fmmone.com](http://www.fmmone.com/)).

One other area of concern is the lack of oversight and auditing over
price reporting through the NASS survey. It is a more than a little
disturbing that my family's income is based on a survey that essentially
uses the honor system. Whether there is fraud or not, whether it is
malicious or not, USDA needs to audit the reports just to be certain
that they are correct.

Lastly, part of the reason why we need to streamline the process is the
petition that is currently before the Department asking that would
increase the price of milk for Class I and Class II. With the price of a
gallon of milk in Brooklyn tied directly to the price a 40-pound block
of cheese in Chicago, there certainly is merit to have a hearing an deal
with the issue. The length of time that this hearing will take is an
effective barrier from any regular farmer from following or
participating in the process because few of us have three years to
follow a hearing process.

I thank you for the opportunity to speak here today and would be happy
to answer any questions or discuss these issues further.