Purdom Testifies Before House Interim Committee on Emerging Issues  11/02/13 2:36:32 PM

Testimony of Larry Purdom
President, Missouri Dairy Association
Before the House Interim Committee on Emerging Issues
October 15, 2013

Chairman Guernsey, vice-chairman Reiboldt, members of the committee, I commend you for your interest in strengthening and growing the state’s dairy industry.

My name is Larry Purdom and along with my wife and daughter, I milk 140 cows, grow corn silage and hay and raise a small herd of beef cows on 700 acres. I currently serve as the President of the Missouri Dairy Association and it is in that capacity that I testify before you today.  I also serve on the board for the Midwest Dairy Association and Dairy Farmers of America.  I am also an active participant in my county Farm Bureau.

For over twenty five years Missouri’s dairy farms have been on the decline.  Since 2009 and 2010, when the entire industry suffered historically low prices and then several consecutive years of weather related disasters, the state’s trend has been exacerbated.  Last year alone, Missouri lost 100 dairy farms.

It is important we find a way to support our farms.  As you have learned, Missouri imports a great majority of its milk to meet its processing and consumer needs.  Transportation costs are expensive.  Without a strong and growing dairy industry, we risk losing processing capacity, we risk losing processing jobs and the current contribution the processing industry and the producer community currently contribute to the state’s economy.

The Missouri Dairy Association has been working with the University of Missouri and other leaders in the state’s industry to formulate a proposal we think will support the dairy industry and incentivize growth.  I encourage the committee to consider a three-pronged proposal that addresses stabilizing our current producers, incentivizing growth and new entrants and providing relief during times of natural disaster.

Stability
I encourage the committee to join our effort and consider developing a Missouri-specific margin insurance program that would provide Missouri’s dairy farmers assistance when we need it most, when the price we are receiving for our milk is perilously close to the cost of producing it.  A program like this would be effective and achievable.


Growth
I believe that growth in the state’s dairy producer sector will come from within.  It will be the product of Missouri’s dairy farmers adding to their herds or our sons and daughters having the courage, the capital and the support to go out on their own and start their own operations.  Courage and support have never been a problem for farmers – access to affordable capital often is.  I urge the committee to consider a growth program in the form of a forgivable loan.  For producers willing to increase their production by 15%, the state should provide cost share assistance to purchase livestock, upgrade facilities or establish new facilities. After seven years, if the operation maintains that growth, that loan transitions to a grant.  If the operation does not maintain that growth volume, the loan must be paid back.

Disaster
Federal disaster assistance programs have gone unfunded for the last four years. These funds are meant to assist farmers when their operations are struck with flood, drought, blizzard or other natural occurrence.  Missouri’s farmers have recently been dealt with consecutive years of weather related disasters with no help from these programs because of Congress’ inability to fund them.  For the sake of those of us left, who found it difficult to source feed, who lost livestock or who had poor pastures these last few years, I urge the state to establish a disaster program at the state level to assist producers addressing natural disasters on their operations.

The state of Missouri can no longer count on the U.S. Congress to provide its farmers the risk management tools, the growth opportunities and the disaster assistance needed to address the extreme market and weather volatility that has become common.

The Missouri Dairy Association looks forward to working with this committee on programs that will stabilize and strengthen the industry over the long term.  Thank you for the opportunity to comment.

 
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