Times are tough in America's dairyland. Ironically, at the same time this bill is pending, one of the most important innovations to the long-term health of the dairy industry is being severely encumbered by officials in Washington. Customers shy away from the dairy case when prices fluctuate. Instead of milk, they buy bottled water and calcium-enriched fruit juice and shy away from yogurt, cheese, sour cream and cream cheese. With forward contracts, everybody wins.
Consumers are happy and healthy and grocery stores generate more business for the dairy case.
Processors can be more efficient in everything from scheduling job shifts to shipping out, because they know their costs and the quantities of milk they'll be handling. Dairy farmers can lock in not only stable prices but also profits. This restriction eliminates more than 30 percent of the U.S. milk supply from the potential benefits of forward contracting. And as a rule of thumb, this exemption denies opportunity proportionately more to dairy farmers the further east they are located. Those farmers generally see a larger percentage of the milk they produce go directly to the consumer as beverage milk, rather than to manufactured dairy products.