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Proposed Dairy Policies at Odds with Growing U.S. Dairy Exports

Oct 11, 2007


For Immediate Release

Media Contact: Marti Pupillo202-220-3535

Proposed Dairy Policies at Odds with Growing U.S. Dairy Exports;Applauds Senate's Rejection Last Week of Dairy Tariff

(Washington, D.C. — October 11, 2007)The International Dairy Foods Association (IDFA) is urging members of Congress to pay heed to the changing global dynamics in the dairy industry and U.S. trade obligations, as Congress considers dairy tariffs and other programs in the new Farm Bill.

Last week in Dublin, Ireland, the International Dairy Federation forecast continued strong world dairy markets, driven by growing demand in various regions of the world for milk and dairy products, especially in Asia. In recent years, the United States has grown to be a major dairy exporting country. For the first seven months of this year, approximately 11% of U.S. milk production was exported in the form of dairy products -- a more than two-fold increase from just five years ago.

Meanwhile, the U.S. Department of Agriculture reported to the World Trade Organization (WTO) last week that under the 2002 Farm Bill, the Milk Income Loss Contract (MILC) program and Dairy Price Support Program make up to 65% of total U.S. amber box trade-distorting subsidies. And members of Congress continue to propose dairy tariffs in the new Farm Bill that do not comply with WTO trade rules and invite retaliation from trading partners.

"The status quo of domestic dairy policy will not work as the United States takes a leadership position in dairy product trade," said IDFA President and CEO Connie Tipton. "U.S. dairy exports are increasingly important to U.S. dairy farmers and processors; we can't afford to jeopardize the opportunity to grow our share of the robust world dairy market.

"We continue to be concerned about the trade-distorting nature of the dairy farm safety net, which was put in place decades ago, when we were insulated from -- and disinterested in -- world markets," she added. "The landscape is completely different today -- and our Farm Bill needs to reflect that change or risk harm to U.S. dairy farmers and dairy companies."

While the House Farm Bill makes some incremental improvements in dairy programs, the underlying support programs are still trade-distorting, as demonstrated by the recent USDA report to the WTO, Tipton noted.

"Other countries are looking at our policies and the billions of dollars of U.S. trade-distorting dairy support reported to the WTO with skepticism. We hope the Senate takes the opportunity to reform our dairy programs so that the U.S. dairy industry can continue to take advantage of our emerging position as a global dairy exporter," Tipton said.

On a positive note, the Senate Finance Committee last week considered and rejected a proposed tariff on milk protein concentrate imports that would have jeopardized the U.S. position in global dairy trade.

The Farm Bill that passed the House retains the Dairy Price Support Program and MILC, and also includes an import assessment on dairy products that violates the United States' WTO obligations.

"We hope that the Senate Agriculture Committee will consider the implications of current dairy programs in light of our growing dairy exports and ensure that our dairy farm safety net is trade compliant and does not invite retaliation by including such unnecessary programs as the dairy import assessment," Tipton said

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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 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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