Milk Surpluses

May 2, 1962

Report Outline
Federal Government and Milk Surplus
Proposals for Control of Production
Structure of American Dairy Industry
Dairy Products and Health Questions

Federal Government and Milk Surplus

Reduction of Government Price Supports

Producers of milk and milk products, already suffering from over-production, under-consumption and import competition, received a new blow on April 1 when government price supports on milk and butterfat were cut from 83 to 75 per cent of parity. Secretary of Agriculture Orville L. Freeman told a news conference, two days before the cut went into effect, that under the Agricultural Act of 1949 price supports could be held at a level above the minimum only if the higher rate was needed to “insure an adequate supply.”

No one contends that domestic milk supplies are less than adequate to meet current demand. Despite lowering of price supports, the federal government expects to pay out $523 million to remove milk surpluses from the market in the marketing year that began April 1. Dairy farm income may drop during the year by as much as $275 million as a result of the reduction in price supports. Nearly a million American farmers produce milk, and about 400,000 of them receive more than one-half of their income from dairying. Cash farm income from milk, running at a rate of $4.7 billion annually prior to the change in support prices, was second only to income from cattle and calves.

Hopes for effective stabilization of the supply and demand situation in the dairy industry through new legislation appear dim. Congress and the industry have been unable so far to get together on either emergency or longrange plans. Dairymen vehemently oppose administration proposals for mandatory production controls on milk that would carry stiff penalties for producers exceeding their allotted quotas. A compromise plan to make payments to farmers who reduce milk production voluntarily, and to penalize those who exceed 1961 production, also has failed of acceptance.

ISSUE TRACKER for Related Reports
Farm Policy
May 01, 2012  Farm Subsidies
Dec. 02, 1994  Farm Policy
Aug. 05, 1994  Genetically Engineered Foods
Mar. 25, 1983  Farm Policy's New Course
Oct. 28, 1977  Farm Policy and Food Needs
Apr. 06, 1966  Reversal of Farm Policy
May 02, 1962  Milk Surpluses
Dec. 07, 1949  Brannan Plan
May 01, 1939  Agriculture Under the Trade Agreements
Sep. 20, 1937  Farm Legislation and the Ever-Normal Granary
Nov. 05, 1935  Potato Control Under the A.A.A.
Apr. 25, 1934  Stabilization of the Dairy Industry
Jan. 24, 1930  The Federal Farm Board
Sep. 24, 1928  Wheat Pools in Canada and the United States
Feb. 10, 1927  The McNary-Haugen Bill
Dec. 10, 1924  The President's Agricultural Conference
BROWSE RELATED TOPICS:
Farm Loans, Insurance, and Subsidies
Farm Produce and Commodities