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Congress Considers Several New Bills on Dairy Policy Reform Senators Arlen Specter (R-PA) and Bob Casey (D-PA) last week introduced two new dairy bills, the Federal Milk Market Improvement Act of 2007 and the National Dairy Policy Reform Bill. These bills would simplify milk pricing under the Federal Milk Marketing Orders, require mandatory reporting of dairy prices on a regular basis and make dairy forward contracting permanent and available to processors and cooperatives."The senators from Pennsylvania always take a leadership role in shaping dairy policy, and these bills show their desire to ensure a strong future for dairy, especially their commitment to permanent dairy forward contracting," said Chip Kunde, IDFA senior vice president. The Federal Milk Market Improvement Act of 2007 (S.1721) would reduce the number of classes of milk from four to two. All milk used for manufacturing purposes would be classified as Class II milk, and the U.S. Department of Agriculture (USDA) would determine its price based on the national average cost of production. The Class II price would become the basis for calculating the price of Class I milk. The National Dairy Policy Reform Bill (S. 1722) would create a Milk Target Price Program to pay farmers when the price of Class III milk falls below a trigger price of $12 per hundredweight. IDFA opposes a provision in the bill that would allow the trigger price to be modified by a feed adjustment factor, allowing USDA to change the price to reflect rising feed costs. In addition, the bill calls for a permanent dairy forward contracting program as well as a pilot program for milk revenue insurance. The Senate bills are similar to a bill (H.R. 2462) introduced last month by Rep. Tim Holden (D-PA), who is vice chair of the House Agriculture Committee. Also in the House, Rep. Ron Kind (D-WI) recently introduced a bill (H.R. 2720) as part of the larger Farm Bill reform package, known as "Farm 21." The bill revises the dairy farmer safety net by proposing to make direct payments to dairy farmers for use in farm investments and to stabilize farm income when prices fall. In addition, the bill would eliminate the Dairy Price Support Program and grant $75 million in loans to farmers who want to build methane digesters. During recent consideration of agricultural subsidy programs in the 2007 Farm Bill, however, the bill was voted down by the House Agriculture Committee. "The dairy policy piece of Farm 21 includes several ideas consistent with IDFA's blueprint for the 2007 Farm Bill," Kunde said. "While the bill was defeated in the Agriculture Committee, it may have broader support when the entire House takes up the Farm Bill." For more information about IDFA's Farm Bill blueprint, visit www.healthydairyindustry.org.
Posted July 2, 2007
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