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USDA Raises Milk Prices in Miami, Atlanta and other SoutheasternCities, Ignoring Its Effect on Rising Food Costs

Statement by Connie Tipton, President and CEO International Dairy Foods Association

(Washington, D.C. — May 1, 2008) "Effective today, the U.S. Department of Agriculture (USDA) has increased farm milk prices throughout every county in 14 Southeastern and Appalachian states with the implementation of a controversial Federal Milk Marketing Order change that was announced last month. The International Dairy Foods Association (IDFA) opposes this decision, because the condition that normally would trigger an increase — a documented shortage of milk in the region — clearly does not exist. In fact, USDA reports that milk producers are expanding herds in response to favorable returns during 2007, and cow numbers are expected to increase further in 2008.

"We believe this milk price increase is unwarranted and will ultimately be harmful to consumers who are struggling today to afford every-day necessities. With the cost of food already at an all-time high, we should be doing everything we can to keep milk available and affordable, not unnecessarily raising costs.

"USDA's decision that goes into effect today is a not only a bad deal for the South but also for other parts of the country. The department already sets the cost of farm milk in Florida and other states in the Southeast at a much higher level than the upper Midwest and other parts of the country. This decision will create dramatic disparities among the processing facilities in these Southeastern areas.

"Most consumers do not know that USDA continues to set minimum prices for the majority of milk that is bottled through the authority it was granted in the 1930s, when the United States was suffering through the Depression and local milk supplies were uncertain. Today, with a vast highway system and refrigerated trucks, milk and other dairy products can and do move easily across state borders.

"The outmoded and archaic system must be reformed to better meet the needs of a 21st-century economy. It is astonishing that, while Congress is holding hearings on the high cost of food, USDA has implemented a decision that will raise the cost of milk in the Southeast. Even more unbelievable, USDA now is considering a similar decision that, by the department's own estimates, would raise the cost of milk to consumers by an average of 5.5 cents per gallon and decrease consumption nationwide."

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The International Dairy Foods Association (IDFA), Washington, D.C., represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 550 companies representing a $100-billion a year industry. IDFA is composed of three constituent organizations: the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA). IDFA's 220 dairy processing members run more than 600 plant operations, and range from large multi-national organizations to single-plant companies. Together they represent more than 85% of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States. IDFA can be found online at www.idfa.org