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With a Compromise on Dairy Programs (Washington, D.C. — July 27, 2007) The International Dairy Foods Association (IDFA) recognizes the hard work of the U.S. House of Representatives in passing its version of the 2007 Farm Bill, which includes some improvements in U.S. dairy programs over the next five years. The final bill contains a compromise dairy package that essentially extends dairy programs from the 2002 Farm Bill, but also includes several key reform ideas, such as dairy forward contracting and a commission to improve federal milk pricing policies. The House approved the Farm Bill today. "We commend Agriculture Committee Chairman Collin Peterson (D-MN), Dairy Subcommittee Chairman Leonard Boswell (D-IA) and Ranking Member Bob Goodlatte (R-VA) for their leadership in passing a dairy compromise reflecting a number of initiatives supported by IDFA," said Connie Tipton, IDFA president and CEO. The dairy provisions of the Farm Bill reauthorized a dairy forward contracting program, which was a high priority for IDFA. "We are grateful that the members of the House recognize the importance of forward contracting. Dairy buyers and sellers desperately need this valuable risk management tool to manage enormous price fluctuations in the market," said Tipton. Forward contracting is authorized in the bill until 2012, with a provision to allow contracts to extend three additional years if they are entered into before the program expires. Increased authority was given in this provision for the Secretary of Agriculture to investigate allegations of contract coercion. The dairy title also adopted a provision that would delay implementation of an assessment on existing contracts for imported dairy products. The dairy assessment was originally authorized in the 2002 Farm Bill but not implemented, because it does not comply with U.S. trade obligations. Reps.Goodlatte and Tim Walberg (R-MI) provided critical support to Chairman Peterson on ensuring that U.S. food companies that import consumer-demanded dairy products have at least a 12-month grace period for contracts that were entered into before passage of the new import tax. "While we remain very concerned about the negative ramifications of this shortsighted tax on dairy imports, we appreciate that the committee recognized the need to respect current contracts until companies can make the transition to the new import assessment," said Tipton. IDFA welcomes the inclusion of a commission to enhance the competitiveness of the dairy industry and streamline the Federal Milk Marketing Order system. The commission would be composed of 18 members from all segments of the dairy industry, including processors, dairy economists, a consumer representative and producers. Within two years, the commission will make recommendations to Congress and the U.S. Department of Agriculture (USDA) on legislative and regulatory changes that would improve the Federal Milk Marketing Order system. The commission was one of IDFA's key recommendations and was supported in the Farm Bill by Rep. Jim Costa (D-CA). The dairy title also includes a widely supported provision to expedite the Federal Milk Marketing Order hearing process, which today can take as long as two years to reach a decision. Overall, the dairy title in the House Farm Bill represents a compromise package that achieved wide support across the dairy industry. "We brought the dairy community together and, for perhaps the first time, there's no dairy war going on because they sat down and compromised, and we can't thank them enough," said Rep. Leonard Boswell (D-IA), chairman of the Livestock, Dairy and Poultry Subcommittee. IDFA and the National Milk Producers Federation (NMPF) came together in a historic effort and sent a joint letter to House members urging them to oppose all other dairy amendments. During consideration on the House floor, two amendments that dealt with using cost-of-production variables, such as feed and fuel, in the government's milk price-setting regulations were offered and withdrawn. In opposing the amendments, IDFA noted that USDA already has the authority to take into account the cost of production along with a number of factors when setting milk prices. "Overall, we are pleased that we could work with Subcommittee Chairman Boswell and NMPF and that the House was able to pass dairy provisions that, on the whole, move the dairy industry forward," said Tipton. In a separate part of the Farm Bill, IDFA is disappointed that the sugar provisions have made a bad program worse. They increase the price support rate for sugar, require USDA to buy surplus sugar for ethanol and further restrict sugar imports. "We strongly supported the amendment offered by Congressmen Danny Davis (D-IL) and Mark Kirk (R-IL) to extend the current program and minimize costs to the U.S. taxpayer, and were disappointed that it was defeated on the House floor," Tipton said. The Senate Agriculture Committee, chaired by Senator Tom Harkin (D-IA), is expected to release its version of the Farm Bill in September. IDFA will continue to work with Congress on supporting progressive, effective dairy policies for the future of the U.S. dairy industry.
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The International Dairy Foods Association (IDFA), Washington, DC, represents the nation's dairy manufacturing and marketing industries and their suppliers, with a membership of 530 companies representing a $90-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
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