Ag. Subcommittee Reviews Challenges Facing Nations Dairies, Needed Reforms

091521 Ag Dairy Hearing
VIDEO CLIP:  Senator Hyde-Smith Addresses Democratic Tax Threat to Family Farms.
VIDEO CLIP:  Senator Hyde-Smith Addresses Hardships on Dairy Farms in Mississippi, Southeast.
VIDEO CLIP:  Tate County Dairy Farmer Mike Ferguson Testifies Before Senate Agriculture Panel.

WASHINGTON, D.C. – U.S. Senator Cindy Hyde-Smith (R-Miss.) today warned that the agricultural portion of the Democrats’ evolving $3.5 trillion tax and spend package will compound problems and the future viability of the nation’s family dairies, especially in states like Mississippi.

Hyde-Smith is ranking member of a subcommittee of the of the Senate Agriculture Committee that convened a hearing titled, “Milk Pricing:  Areas for Improvement and Reform.”  Mike Ferguson, owner of Ferguson Dairy Farm in Tate County, testified remotely at the hearing.

“As we speak, the U.S. House of Representatives is crafting legislation that aims to spend $135 billion or more just within USDA’s jurisdiction on programs the Agriculture Committee oversees.  The price tag of the overall bill is $3.5 trillion.  This is deficit spending that will be paid for by hiking taxes on family farmers,” Hyde-Smith said.

“Unfortunately, the public has not had any input into this process.  The same can be said about most members of this committee and Republicans as a whole.  This is a product being developed by Democratic leadership behind closed doors – a reckless tax and spend agenda,” she said.

Hyde-Smith pointed out that the Democrats’ plans for agriculture and climate change offer no assistance to the dairy industry, which will be harmed by proposed changes in capital gains tax rates and estate taxes, or stepped-up modifications, to pay for the $3.5 trillion plan.  A recent Texas A&M University Agricultural and Food Policy Center study indicated Mississippi would be the state most heavily affected under the Democrats’ proposed capital gains tax changes and generational transfers.

Ferguson concurred testifying that the proposed tax changes would be unaffordable to family farms.

“We cannot afford this additional tax program.  These farms that have been in the family for generations, they will be going by the wayside,” Ferguson said.  “On a stepped-up basis, there are farms that have gone up 300 or 400 percent in value and how can we possibly tax these farms at that rate, adding this extra burden to the local farmers.  I just cannot see the logic in that.”

Mississippi, like many Sothern states, is a milk deficit state—those states that consume more milk than they produce.  The state claims 60 Grade A dairy herds that generated $24 million value of production milk in 2020.

Ferguson outlined growing pressures on Mississippi dairies, noting a 30 percent decrease in the number of farms over the past five years.

“Mississippi is steadily and rapidly losing dairy farms. Over the past five years of extremely low milk prices, producers have struggled to put food on their own families’ tables while providing it for the rest of us.  We have lost approximately 26 dairies over this time, from 86 in 2016 to 60 now, a 30 percent decrease,” Ferguson testified.  “Many of our 60 family farms in the state will not be here in a few years if things don’t change for them.”

Hyde-Smith encouraged her Agriculture Committee colleagues to return to its traditional bipartisan process to address Class I milk price formula changes and other reforms to help family diaries survive price volatility and other problems created by the ongoing pandemic.

“There are certainly options to address the situation facing dairy producers today, whether it’s another statutory change to the formula or changes achieved by administrative processes,” Hyde-Smith said.  “Farmers, ranchers, dairymen, consumers, and everyone in between have long benefited from the professional, deliberative, and bipartisan manner in which this committee operates.  This is not just a feel-good talking point.  It’s the way that we are expected to serve and the way this Committee has operated for many years.”

Access the Subcommittee on Livestock, Dairy, Poultry, Local Food Systems, and Food Safety and Security hearing, including witness testimony, here.