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Published April 03, 2013, 09:41 AM

Dairy bill would restructure pricing system

Sen. Kirsten Gillibrand, D-N.Y., announced on April 2 that she and Sen. Susan Collins, R-Maine, will introduce a bill to change the way dairy prices are set. She also said she still wants small dairy farmers exempt from the supply management provisions in the dairy bill that House Agriculture Committee ranking member Collin Peterson, D-Minn., has written.

By: Jerry Hagstrom, Agweek

WASHINGTON — Sen. Kirsten Gillibrand, D-N.Y., announced on April 2 that she and Sen. Susan Collins, R-Maine, will introduce a bill to change the way dairy prices are set. She also said she still wants small dairy farmers exempt from the supply management provisions in the dairy bill that House Agriculture Committee ranking member Collin Peterson, D-Minn., has written.

Gillibrand also said that she will reintroduce bills she sponsored last year to help small dairy producers.

Dairy is the “cornerstone” of New York agriculture, Gillibrand said.

She added that she wants to maintain dairy production throughout the country because she considers it a national security issue. Losing the balance of production in dairy is dangerous, Gillibrand said, because milk can become contaminated through nuclear power accidents and bioterrorism.

Consolidation, she said, leads to pressure to import milk. “I don’t want to buy milk from China,” she added.

The Dairy Pricing Reform Act that Gillibrand and Collins will introduce would force the U.S. Department of Agriculture to begin a hearing process to restructure the pricing system and to release its recommendations from that process to Congress.

This bill builds on language Gillibrand secured in the Senate version of the farm bill last year that requires USDA to study different methods of determining prices, including competitive pay pricing or shifting from a four-class system to a two-class system.

Peterson’s bill

Gillibrand also signaled that she has problems with the dairy bill introduced by Peterson.

Peterson’s bill, also included in the Senate version of the farm bill, is popular with dairy producers nationally, but not with dairy processors, because it includes a supply management provision.

Gillibrand said Peterson included that provision because it was the only way to make an insurance program work, but that small producers should not be subject to pressures to manage supply because their level of production will not affect production on a national scale.

Gillibrand’s Dairy Income Fairness Act would give farms with 200 cows or less a guaranteed $6.50 margin — the cost of milk minus the cost of feed — and exempts the first 200 cows from supply management. The bill would also extend the current Milk Income Loss Contract program for nine months, pegged to inflation.

She said she would also press the Senate to make reporting of cold storage inventory to the National Agricultural Statistics Service mandatory, and give USDA the authority to audit warehouse inventories to help bring more stability to dairy trading prices.

Gillibrand also sponsored the Democracy for Dairy Producers Act, which would require dairy cooperatives that engage in bloc voting to provide their member farmers with written notices when votes occur, and which would require information to be provided regarding any proposed milk marketing order reforms.

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