Associated Milk Producers Inc

315 N. Broadway, P.O. Box 455, New Ulm, MN 56073

Phone: 507-354-8295

I want to thank you Chairman Lugar and other members of this committee, for allowing me to participate in the hearing.

I am Wayne Bok of Geddes, South Dakota. I own and operate a dairy farm in south central South Dakota, as well as serving as president of Associated Milk Producers Inc. AMPI is a Midwest dairy cooperative, representing 6,500 members in seven Midwest states.

Before driving to the airport yesterday, I helped milk cows. While I am gone, my sons will milk our herd of 80 Holsteins.

Statistics define my Midwest dairy as average. I define the dairy as the sum of all I have worked for the past 34 years.

When I began dairying, I milked 20 cows, using what is now considered antiquated equipment. Though milk prices fluctuated, there was always a strong support price. As a Midwest dairy farmer, I was milking in America's dairy land, marketing through our hometown cooperative. I wouldn't call my early years of milking the good ol' days, but it's important for you to know

where I've been in this industry before discussing the future.

Today, I milk 80 cows and that is not enough to support two sons and their families. To add value to my milk, I am marketing through a dairy cooperative which moves dairy products up the marketing chain.

If the next generation of Boks wants to milk for another 30 years, we must invest in our family business. Before we invest in state-of-the-art dairy facilities and technology, we need state-of-the art dairy policy under which I can operate this multi-million dollar business.

You can't operate a 21st century dairy with depression-era dairy policy. This is not my father's dairy. I can't use my father's dairy policies.

U.S. dairy policy must catch up with the dairy industry. The scope and size of today's dairy farms and cooperatives illustrate my point. We are moving from regionally based dairying to the national and international scene. Today, I'm competing with dairy farmers on both U.S. borders for cheese, nonfat dry milk and butter markets. In coming years, I may be competing with

dairy farmers on both sides of the ocean.

We face an environment of accelerated change caused by economic globalization, market volatility and intense competition. We need to leave regional mindsets and move to a national approach for dairying, marketing and policy.

The dairy policies passed by Congress last fall merely add another block to dairy's growing domestic barriers. Efforts to bring rational reform to dairy policies failed as regions of this country which benefit from the status quo continue to block those reforms.

Regionally based dairy policies such as federal milk marketing orders and dairy compacts are destructive. How can I compete internationally when I am not allowed to compete domestically?

In a country where California cheese can end up in a Minnesota cheese sauce plant or Iowa milk in a Florida milk carton, it makes no economic sense to build trade fences for milk - such as we've seen through regional dairy compacts. Isn't this the very reason our forefathers wanted a unified national economy?

As congressional leaders, you can tear down walls with nationally oriented dairy policies. When developing a policy, ask yourself: does this policy hinge on regional bias? If the answer is yes, then discard that idea.

Allow me to offer three ideas that work together to yield a program that helps every dairy farmer - no matter where he milks cows:

• Maintain a dairy price support system

• Protect domestic milk markets

• And manage our country's milk supply

We all know policy debates are driven by an economic backdrop. With mounting milk surpluses and subsequent low prices, our industry is quickly joining other agricultural commodities facing depressed prices.

We need to think outside of dairy's policy box.

Chairman Lugar and members of the Committee, dairying is big business. Since 1990, the size of the average dairy herd is up about 75 percent. Dairy farms are changing. Dairy cooperatives are changing. Markets are expanding. Dairy policy must adjust to this new environment.

If individual family farms commit hundreds of thousands, even millions of dollars, to an on-the-farm business, you need to adopt national dairy policies which support these efforts.

I urge this Congress to consider closely the words of Abraham Lincoln, who said, "A house divided against itself cannot stand." It's time to move beyond regionally discriminatory dairy policies that divide our nation's farmers and to work toward national policies that work for the nation as a whole.

Thank You.