USDA dairy briefing takes a partisan turn

An Agriculture Department senior economist and two Farm Service Agency officials made a presentation to a dairy group this past April in which they said USDA's "goals and objectives" this year are to "maximize votes" in major dairy states -- California, Wisconsin, Minnesota, New York and Michigan -- and suggested how those votes could be maximized.

The presentation, complete with a USDA logo and boxing elephants and donkeys, was also placed on the Web site of the American Dairy Products Institute, the sponsoring organization, and has recently caught the attention of other farm groups and congressional aides. It says on the page that bears the USDA logo the presenters were Larry Salathe of USDA's Office of the Chief Economist, and William March and Milton Madison of FSA. It also noted that the presentation was given April 20.

A page is illustrated with a cartoon that shows a woman and a man putting their votes into a ballot box, with a sign that reads, "Your support and influence are appreciated." It also indicates that the way to maximize votes is "strong market prices" through "market fundamentals and supportive policy actions." The next page, which includes a drawing of a laughing cow, says market fundamentals look strong in 2004, but that "constituents" would be concerned about the federal budget deficit, the continuation of nonfat dry milk donations, dairy compacts and imports of milk protein concentrates.

Another page noted that the Milk Income Loss Contract payment is scheduled to decline and terminate, while another noted that imports of milk protein concentrates are down from a "peak, but [are] an ongoing issue." The federal budget deficit "will be addressed after the election" and increases the likelihood that the milk income loss program will be terminated, the presentation concluded.

The presentation also said it is unlikely there will be another "tilt" -- a term for a convoluted calculation that affects dairy prices -- before the election and that the debate about dairy compacts will "resurface" if the milk income loss program is not extended. Import legislation is "unlikely under the current price environment," the paper also said. USDA Chief Economist Keith Collins, Salathe's boss, said in a recent interview that "Larry made a mistake" with the "smartass, off-the-cuff comments" in his presentation. Collins said Salathe was trying to make the point "that it's hard to make policy in the last six months as a runup to the election."