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Missouri Governor Signs Legislation Aimed At Revitalizing State’s Dairy Industry

Missouri Governor Jay Nixon last Friday signed into law the Missouri Dairy Revitalization Act, which he said “will yield tremendous benefits for our rural communities and our entire economy.”

The measure creates the Missouri Dairy Industry Revitalization Fund, which aims to enhance and improve Missouri’s dairy and dairy processing industry.

It requires the University of Missouri to conduct or contract with an independent research company to conduct research to determine the estimated sales tax revenue generated in the state from the sales of dairy products and must provide the estimate to the Missouri Department of Agriculture by October 1 of each year.

The law specifies that no more than 40 percent of the estimated sales tax revenue generated from the sales of dairy products may be appropriated from the general revenue fund to the Missouri Dairy Industry Revitalization Fund and the funds must be spent in the following order of priority:

• First, to the dairy producer margin insurance premium assistance program created under the bill. Under this provision, the Missouri Department of Agriculture will establish and administer a margin insurance premium assistance program for the purpose of assisting dairy producers who participate in the federal Margin Protection Program for dairy producers.

All Missouri dairy producers who participate in the federal Margin Insurance Program for dairy producers will be eligible to apply and participate in the state’s premium assistance program. Dairy producers who wish to be considered for the program must apply with the Missouri agricultural and small business development authority by January 1 of each year, and will have to provide proof of participation in the federal Margin Protection Program by submitting a receipt of their paid annual federal premium payment.

Eligible program participants will receive reimbursement of 70 percent of their federal premium payment up to a maximum premium reimbursement rate of 34 cents per hundredweight of milk.

• Second, the Missouri dairy scholars program, which will be administered by the Missouri Department of Agriculture. The program will provide scholarships for eligible students in an agriculture-related degree program who make a commitment to work in the agriculture industry in Missouri as a condition for receiving such scholarship. Each scholarship recipient must agree to work in Missouri’s agriculture industry for at least two years for every one year the recipient receives the Missouri dairy scholars scholarship.

Subject to appropriations, each year the department will make available to eligible students up to 80 scholarships in the amount of $5,000 each.

• Third, to a commercial agriculture program created under the law. The University of Missouri’s commercial agriculture program will conduct an annual study of the dairy industry and will develop a dairy-specific plan for how to grow and enhance the dairy and dairy processing indutries in Missouri.

“Missouri’s dairy industry supports more than 23,000 jobs and contributes $2 billion to our state’s GDP,” Nixon said.

As least as far as production is concerned, Missouri’s dairy industry has been in decline for a number of years now. The state’s milk production surpassed 4.0 billion pounds for several years in the 1940s and 1950s, including a record 4.132 billion pounds in 1950. That year, Missouri ranked ninth in the US in milk production.

Missouri last produced more than 4 billion pounds of milk in 1956. The state’s milk production initially fell below 3.0 billion pounds in 1971, but rose above that level several times over the next two decades. The last time Missouri’s milk production topped 3 billion pounds was in 1990.

Milk production in the state continued to decline after that, falling under 2 billion pounds in 2001 and below 1.5 billion pounds in 2010. Last year, Missouri’s milk production totaled 1.383 billion pounds.

Missouri’s cheese production has also been declining over the years.
The state’s cheese output increased from 98.6 million pounds in 1970 to a record 239.2 million pounds in 1992 (when it ranked seventh nationally in cheese production), but then declined to under 100 million pounds by 2001.

In 2004, the last year in which USDA’s National Agricultural Statistics Service reported cheese production for Missouri, the state’s cheese output totaled 99.6 million pounds.