By Dean Urdahl
State Representative, District 18B
Minnesota’s dairy farmers will receive good news in a few weeks when Governor Pawlenty unveils his supplemental budget for next year.
The good news: The budget will include our long-fought for Dairy Investment Tax Credit. If the plan goes through, which I believe it will, dairy producers would receive a 10 percent tax credit on up to $500,000 of investments to upgrade their operations. Building and facility improvements, new machinery and new equipment purchases all count toward the credit.
The credit also carries forward from one year to the next so dairy producers can take full advantage of its benefits.
The governor made his announcement at the 32nd Annual Midwest Dairy Expo in St. Cloud. I think the fact that he chose to unveil the plan at such a high-profile event indicates his high level of support for the credit and I am confident that this will be the year we finally get this important dairy booster passed and start putting investment dollars back into the dairy industry.
The dairy industry needs this credit because while dairy is the second-largest livestock contributor, its performance is the weakest. In 1980, we produced 7 percent of the national milk supply but that number now sits around 5 percent.
If we need even more proof that right now is the time to pass this credit and encourage investment, the 2004 Livestock Task Force Report said the dairy industry is “at risk of becoming obsolete in comparison to other states as farmers and processors have hesitated to make reinvestments in their facilities.”
We have a $3.1 billion dairy production industry that employs more than 27,000 Minnesotans. If any other industry this large were facing the same situation the state would have stepped in a long time ago.
I first brought the tax credit idea to the Legislature in 2003 and have been the chief-author for the credit every year since. Unfortunately, despite our best efforts, not everyone in St. Paul sees the dairy industry for the importance that it deserves. But I think that tide is starting to turn and I expect strong legislative support next year to help restart the dairy industry.