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Forward Contracting and Federal Order Commission in House Ag Bill; Floor Action Expected This Week

Jul 20, 2007


For Immediate Release

Media Contact: Marti Pupillo202-220-3535

Balanced Dairy Subcommittee Bill Preserved in Spiritby House Agriculture Committee

(Washington, D.C. — July 20, 2007) The International Dairy Foods Association (IDFA) commends the House Agriculture Committee for preserving the Dairy Subcommittee's balanced recommendations in the full committee consideration of the 2007 Farm Bill. The final bill, approved yesterday, includes several key reform ideas, such as forward contracting and a commission to improve federal milk pricing policies.

Showing true leadership, Subcommittee Chairman Leonard Boswell (D-IA) urged committee members to support the delicate, negotiated compromise reached by producers and processors.

"Rep. Boswell did an excellent job of assuring that the recommendations in the well-crafted and balanced dairy title were considered and accepted," said Connie Tipton, IDFA president and CEO. "We are pleased to have more risk management tools available for producers and processors, and a commission to review the Federal Milk Marketing Order programs as part of this compromise."

Subcommittee Chairman Boswell supported a compromise agreement that will reauthorize the dairy forward contracting program until 2012. According to the agreement, contracts may extend out to 2015 as long as participants enter into them before the program expires. The compromise also requires the U.S. Department of Agriculture (USDA) to ensure that forward contracts are entered into voluntarily and to investigate any allegations of coercion that may arise.

"We are grateful to Chairman Boswell and Rep. Steve King (D-IA), who helped champion this effort, for recognizing 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.

IDFA is disappointed with the opposition to forward contracting expressed by Reps. Dennis Cardoza (D-CA) and Jim Costa (D-CA), whose state exists outside the federal order system and is unaffected by these forward contracting provisions, as well as negative comments by Rep. Steve Kagen (D-WI) whose dairy processors, cooperatives and farmers strongly support the program.

The committee also considered language that will require an assessment on all dairy imports to add to the funding available for the producer-funded generic promotion program. This assessment was mandated in the 2002 Farm Bill but was never implemented. IDFA opposed this new "tax" on imported dairy products.

While the assessment was included in the committee's version of the Farm Bill, Chairman Collin Peterson (D-MN) expressed his willingness to work with Rep. Tim Walberg (R-MI) and Committee Ranking Member Bob Goodlatte (R-VA) toward a compromise on the issue.

"I think it has been accurately pointed out that a lot of the dairy products that are imported go into products that do not benefit from the promotion program," noted Goodlatte.

"We applaud the bipartisan efforts of Chairman Peterson and Ranking Member Goodlatte to help the dairy industry maintain a competitive position in the global marketplace. Implementing the import assessment now could create trade barriers and additional cost to consumers," Tipton said.

IDFA also commends Rep. Jean Schmidt (R-OH) for opposing the idea of mandating higher nonfat milk solids standards for fluid milks across the nation. Rep. Schmidt expressed concern that the new standards had "the potential to raise the price of milk and also to possibly affect the taste of the product."

IDFA has long opposed mandating higher nonfat solids standards for fluid milks because of the higher costs and the lack of availability of fresh nonfat solids supplies in some regions.

IDFA was also successful in encouraging the House Agriculture Committee to include a commission in the Farm Bill to enhance the competitiveness of the dairy industry and streamline the Federal Milk Marketing Order system.

The Farm Bill is expected to reach the floor of the House of Representatives for action next week. Meanwhile, the Senate Agriculture Committee is not expected to release its version until September.

IDFA will continue to work with Congress on supporting progressive, effective dairy policies for the future of the U.S. dairy industry.

# # #

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

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