Despite the best efforts of Ronald Reagan and Congress, there seems to be no stopping the American cow.
The mountain of surplus dairy products that quivered with political thunder last year has become a whole mountain range. The government is spending $250,000 an hour to buy the dry milk, butter and cheese that farmers cannot sell.
"This is embarrassing . . . it's unacceptable . . . it's intolerable. It cannot continue," Agriculture Secretary John R. Block told dairy farmers in Seattle last week.
But for the time being, at least, it will continue, with cows producing more milk than can be sold commercially, the government buying surplus faster than it can be disposed of, and the Treasury spending far more than the administration contemplated when it designed its fiscal 1983 budget.
By Block's estimate, the dairy program will cost the government $2.2 billion this fiscal year--about $300 million more than it predicted last fall. The projected cost of $852 million for 1983 has risen to more than $2 billion.
The problem is that dairy farmers apparently did not get the "message" sent them by the administration last year in its partially successful effort to hold down increases in the dairy price-support program.
The idea was to force production down by curbing price supports, which require Uncle Sam to buy all the milk that cannot be sold. The dairy lobby and its supporters in Congress resisted, but the program was cut.
Nevertheless, the milk kept flowing. Production hit a record high 113 billion pounds in 1981, according to USDA. Per-cow output reached a new high, 258 pounds above the 1980 record of 12,147 pounds, and there were 100,000 more cows than in 1980. There was more of the same in January, with production 2 percent higher than in January, 1981.
"The depressing thing," said Steve McCoy, staff economist for the House Agriculture Committee, "is that farmers have not cut back on their herds, and the production disincentives that Congress adopted in the farm bill last year seem not to have affected them."
Block, McCoy and others note that, with the farm economy in sharp recession and feed grain prices low, the guaranteed government price is a bright spot for farmers with milk cows.
"I know that feed is cheap now and cull-cow prices are weak, so we seem to have an incentive for increasing production," Block said. Between Oct. 1 and Feb. 19, federal milk purchases rose 45 percent, cheese 17 percent and butter 6 percent.
Added George Palmer, staff director for the dairy subcommittee: "Pound for pound, dairying is probably more profitable this year than last because grain prices have dropped so dramatically . . . . But any astute farmer would recognize that if this keeps up, the dairy program is going to get creamed."
The surplus is accumulating at such a rate, according to Block, "that we can't give it away fast enough." The administration is distributing 100 million pounds of surplus cheese to the needy and conducting a trial giveaway of butter in Iowa, but that merely dents the pile. The surplus mountain is expected to weigh more than 1.8 billion pounds by year's end.
Block warned last week that, unless dairy farmers move quickly to cut their production, critics of the price support program will become more vocal. "I am deeply concerned that their numbers will grow sharply when our continued inability to deal with the problem becomes widely known," he said.
As Block was issuing his warning, the board of the National Milk Producers Federation endorsed a program it thinks will cut federal dairy expenses by selling surpluses abroad at cut-rate prices.
U.S. dairy prices are nearly double the world rate, which makes the surpluses difficult to sell. The producers' proposal would require congressional approval, but a USDA official said last week that the idea is not expected to get very far.
Part of the problem, he said, could be opposition from Australia and New Zealand, major dealers in the world milk trade. Another could be that the farmers' plan would be seen as an export subsidy running counter to Reagan administration trade policy.
Block, meanwhile, has announced that USDA will hold a public symposium in Kansas City March 22-23 to gather information and suggestions for dealing with the dairy surplus and the mounting federal costs. He indicated that later he will make recommendations to Congress.
Another sour note turned up Friday when the Commodity Credit Corp. board was told that some people won't accept cheese and butter even as a gift.
The Army, Navy, Marines and Coast Guard are using some of the surplus, but the Air Force will have none of it. Because of health concerns about cholesterol in the butter and cheese, the flyboys are served only oleo.