The Federal Milk Marketing Improvement Act of 2009

Dairy Bill S1645

·         Senate Bill S1645 WILL stabilize farm raw milk prices and WILL give all dairy producers the average national cost of production determined by the Economic Research Service (ERS) of the United States Department of Agriculture (USDA). The price would be adjusted quarterly. The Holstein Association's Dairy Price Stabilization Program (DPSP) proposal and National Milk Producers Federation (NMPF) insurance plan proposals does not.

·         Senate Bill S1645 WILL create transparency and the S1645 bill eliminates any reference to the Chicago Mercantile Exchange (CME) for determining milk prices paid to dairy farmers. S1645 creates official transparency to report on import/export volume, milk displacement, and dollar value, and create accountability in the Federal Order amendment process. The crime of price manipulation and corruption have been proven that the CME is prone to this abuse.  The DPSP proposal and NMPF's insurance plan proposals does not.

·         Senate Bill S1645 WILL balance milk production and supply as the bill mandates that the US Secretary of Agriculture must be sure that the imports of dairy products do not exceed the amount of dairy exports before he can use the inventory management program. In other words, dairy farmers will not be required to balance the national oversupply of milk if the displacement of US milk is caused by import increases; this includes imported Milk Protein Concentrate (MPC) and Casein. Under Bill S1645 importation of foreign dairy products will no longer be allowed to destroy dairy farmer raw milk prices. The DPSP proposal and NMPF insurance plan proposals does not.

·         Senate Bill S1645 WILL provide a Supply Management program to be implemented only when dairy exports exceed dairy imports by both the amount of milk represented and by dollar value. Bill S1645 Supply Management first phase-would affect all dairy producers by reducing the Class II price by up to 50 percent on up to five percent of their production. US dairy farmers would always maintain at least a 95 percent national cost of production during this process. It would also give farmers a signal to hold production down as well. The intent of Bill 1645 is not to tell dairy farmers how much milk they can produce, however, overproduction and supply are addressed in the Inventory Management Program of S1645, that is necessary to prevent a small amount of milk forcing all milk down in price per hundredweight. Bill S1645 second phase-if necessary under which when the Secretary of Agriculture would announce a reduced price for producers who have increased production on all milk that is excess of the dairy producers preceding years production. The funds collected from the supply management assessment would be transferred to the Commodity Credit Corporation (CCC) to be used to remove excess products from the market. The DPSP proposal and NMPF insurance plan proposals does not, and would still use the questionable Cow-Kill CWT Program, and government subsidies such as the Milk Income Loss Contract (MILC) program, plus make farmers pay insurance only allowing a farmers debt to increase along with imports, and never solving the problems.

·         Senate Bill S1645 WILL be burden FREE from the tax payers as the bill will be funded by farmers where the cost is paid through supply management provisions. Bill S1645 cost would be minimal as it uses existing entities such as ERS, Market Administrators, Farm Service Agency (FSA), Foreign Agriculture Service (FAS), where the required data is already being done, or could be done with little additional expense. S1645 IS a solution addressing the same roller coaster problems in the industry. Plus the MILC program or price support program, or tax payer dollars government spending. The DPSP proposal and NMPF insurance plan proposals does not, and instead would still use government tax dollars to be spent on weak band-aid programs such as MILC and related relief spending as the same old problems occur only meaning more cost and debt to government and continued cost and debt to farmers. . . this is foolish!

·         Senate Bill S1645 WILL be able to be implemented immediately as stand alone legislation upon being voted on and passed by Congress (both the Senate and House of Representatives) and will not require the Farm Bill to be reopened to be put into effect. The DPSP proposal and NMPF insurance plan proposals  at present are only proposals, that does not help our US dairy farmers and the industries crisis anytime soon, if ever, as time runs out, farmers are going out of business, threatening our US milk supply. These proposals offer no solutions or hope in saving the US dairy industry. To continue the path of using government subsidies that use tax dollars creating more debt for everyone, again is foolish. To continue the watered IV's and never stop the bleeding are futile attempts towards a prognosis of imminent loss and continued crisis.

·         Senate Bill S1645 WILL NOT interfere with existing federal and state marketing orders which remain intact and be responsible for determining the component value of milk.

·         Senate Bill S1645 WILL classify ALL milk used for food purposes as Class I. ALL milk used for manufacturing purposes will be classified as Class II.

·         Senate Bill S1645 WILL protect the continuation of the Federal Milk Marketing Orders (FMMO) from being terminated by a negative vote during the referendum process. The DPSP proposal and NMPF insurance plan proposals does not.

·         Senate Bill S1645 WILL eliminate Make Allowances, which are any cost of manufacturing plants, to be levied on dairy farmers. The DPSP proposal and NMPF insurance plan proposals does not.

·         Senate Bill S1645 WILL NOT be a government takeover. It WILL improve what current government management is needed to set a reasonable price as was prior to 1981.

Authored by Gerald Carlin, Meshoppen, PA and compiled by LoriJayne M. Grahn, Pelican Rapids, MN