Minnesota Dairy Cooperatives Petition for DITC
ST. PAUL, Minn. (May 8, 2007) – The Minnesota Association of Cooperatives (MAC) and eight of the state’s dairy cooperatives are petitioning the conference committee working on the Tax Bill, asking members to support the Dairy Investment Tax Credit (DITC).
“With ninety percent of Minnesota’s milk being shipped through dairy cooperatives, it is imperative that we approach the tax conference committee with a unified message—Minnesota’s dairy cooperative processors need this investment tax credit to assure there is a reliable milk supply to remain in business in Minnesota,” said Bill Oemichen, MAC president and CEO. “The average Minnesota dairy farm was last built or significantly ‘modernized’ in the late 1960s, while the average age of a California dairy is less than a decade. While we have extremely capable dairy producers in our state, we are asking them to compete with other major milk-producing regions while shouldering the disadvantage of inefficient, outdated facilities.”
The state lost 462,000 cows between 1985 and 2005. In that same 20-year period 16,200 dairy operations went out of business.
“A dairy investment tax credit would send an important signal to the state’s dairy producers that their state wants to be a partner in bringing about success for those producers wishing to modernize or expand. This tax credit would help stimulate the kind of reinvestment our dairy industry so dearly needs to remain competitive in a global marketplace,” said Oemichen.
The DITC would not apply to purchasing of cows, but would apply to the modernization of facilities and equipment that will improve efficiency. This will, in turn, increase the opportunity for profit for farmers as they compete against producers in other states and other countries, where modern facilities are already being used. Increased profits will also most certainly increase tax revenues as well.
MAC member-cooperatives signing the petition include: Foremost Farms USA, Associated Milk Producers Inc. (AMPI), Land O’Lakes, Inc., Dairy Farmers of America, Inc., First District Association, Family Dairies USA, Swiss Valley Farms and Bongards’ Creameries.
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