25 May 2007

3 minute read

North America

"Chairman Boswell and Ranking Member Hayes have clearly worked together in a bipartisan manner to forge a solid compromise bill that lays an excellent foundation for the committee's Farm Bill deliberations," said Connie Tipton, president and CEO of the International Dairy Foods Association (IDFA). "We applaud their leadership on what can often be one of the most contentious issues in the Farm Bill -- dairy. We recognize that the overall positive direction is also due to the strong support of the draft by the full Committee Chairman Collin Peterson (D-MN) and Ranking Member Bob Goodlatte (R-VA)," added Tipton.

The subcommittee recommends making permanent the successful dairy forward contracting pilot program, which operated from 2000-2004, to provide all milk buyers and sellers with much-needed risk management tools. Representative Steve King (R-IA), a member of the full committee, has emerged as a leading proponent of a permanent program and was an unrelenting champion for its inclusion in the chairman's mark. The subcommittee also recommends retaining the important producer contract protections in the program.

"A permanent dairy forward contracting program will go a long way toward improving financial certainty for thousands of dairy producers and processors, and providing a level playing field in the dairy marketplace," said Tipton. "I urge the committee to protect the unrestricted right for all milk buyers and sellers to use forward contracts throughout the Farm Bill process."

IDFA hailed the exclusion of a provision to implement the dairy import assessment, which was passed in the 2002 Farm Bill but was never implemented, because it does not comply with U.S. trade obligations.

Taking another bold step, the subcommittee recommends changes to the Dairy Price Support Program and the Federal Milk Marketing Orders.

"I applaud Chairman Boswell for his willingness to open discussion on these outdated programs for a long overdue evaluation," said Tipton.

The chairman's mark also authorizes the U.S. Department of Agriculture (USDA) to use maximum allowable subsidies levels under the Dairy Export Incentive Program (DEIP), which IDFA believes will need to be administered carefully.

"We want to work with the committee to ensure they understand that overuse of DEIP could artificially raise dairy prices at a time of record high milk prices and hurt consumers," Tipton warned.

The committee draft does not address the Milk Income Loss Contract (MILC) program. IDFA has supported efforts to secure additional funding for dairy producers in the new Farm Bill, and others outside of the Committee on Agriculture have made efforts to make additional funding available.

"The subcommittee's bill is an outstanding first step in a long Farm Bill reauthorization process, and we look forward to working with the chairman and members of the House and Senate as the dairy debate continues," said Tipton.

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 http://www.idfa.org.