Dairymen sour on US support cuts
Eau Claire, Wis.
Dairy farmers are solid supporters of the Reagan administration's budget-cutting plans -- but equally solid backers of special treatment for the dairy industry.
Dairymen's arguments center around the fact that modern cow barns and automated milking parlors may look like any other factory, but they can't be switched on and off like an assembly line to balance supply with shifting demand.
The difference is obvious on the Ausmans' 850-acre dairy farm in northwestern Wisconsin.
Dawn had not yet broken through the black sky, but John Ausman and his three full-time farm workers were already milking the first 16 cows.
By the time this twice-daily, seven-day-a-week chore ended for this farm's 157 milk cows, there was plenty of sunshine for other business. Time to check on the 100 head of beef cattle. Then time to move into the fields for planting.
The Ausmans' 120 acres of oats, 125 acres of alfalfa, and 450 to 500 acres of corn in a good year provide enough feed for their cows and steers with surplus for sale. Particularly at planting and harvest time, that much land provides constant work for Mr. Ausman, his hired hands, and his wife and mother, who split bookkeeping chores and pitch in with driving combines and grain trucks at busy times.
John's father, La Verne Ausman, has traded in his farm duties for politics, serving as agricultural adviser for freshman US Rep. Steven Gunderson (R) of Wisconsin.
For five generations of Ausmans, Wisconsin's climate and soil have been ideal for dairy farming. But even when nature cooperates -- instead of knocking down silos and crops as happened last year -- Ausman finds turning a profit a constant challenge.
This bearded bear of man, brushing the low ceiling in his barn office, relies on computer printouts to balance feeds for maximum milk production and to check on cow breeding schedules. He'd like to buy a computerized feeding system, with each cow wearing a computer chip to measure out feed to match her needs.
Ausman also hopes to improve his herd's average milk yields enough so that he can sell breeding stock to other dairy farms.
For the present, however, this farm's profitability and prospects remain largely determined by US government farm policies -- and by whatever compromise Washington works out over the next weeks.
Ausman knows why the administration wants to cut back the dairy price support program -- which cost taxpayers $1.3 billion last year to purchase and store surpluses. "We have got to stop inflation and get the profit picture better for the entire country, and dairy farmers have got to help, of course," he says.
Yet Ausman and other dairymen point out that their industry has been highly regulated by the government for more than 30 years in order to maintain adequate dairy supplies for consumers.
The Ausmans argue that consumers and budget- cutters look only at the dairy program's costs, not its benefits. "The dairy price support program has done exactly what consumers said they were willing to pay for," LaVerne Ausman explains. "It has provided an adequate supply at reasonable prices over the years."
Cutting back price supports drastically, he says, would bankrupt many dairy farms. The result, he believes, would be a switch from a dairy surplus to a dairy shortage and consequent higher prices.
The current price support system results in the US government buying and storing between 7 and 9 percent of milk production to prop prices up to 80 percent of parity -- with "parity" being a complex formula setting prices to give farmers purchasing power equivalent to the benchmark 1910-14 period.
"We recognize that government purchases cannot continue at the present level, " LaVerne Ausman says. "But we ought not be dropping it so much that we get violent adjustments . . . resulting in shortages."
Cutting price supports from 80 percent to 75 percent of parity, he feels, would be sufficient to force marginal producers out of the dairy industry and eliminate the expense of shipping surplus milk from California and Pennsylvania to the Midwest for processing.
The administration's proposal to cut support to 70 percent of parity would bring serious long-term consequences, according to LaVerne Ausman. Such a step would cut government expenditure in the short term. But the cost falling on shoppers would be greater, he feels. The problem of excess supply would turn into a far more difficult problem of excess demand.