February 13, 2002
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email:CGalen@nmpf.org
The 2002 Senate Farm Bill, approved on a vote of 58-40, contains several dairy-related items that were also included in the House Farm Bill version approved last October, such as:
Extending the dairy price support program at the current $9.90/cwt. level;
Authorizing a new national Johne's disease control program;
Extending the Dairy Export Incentive Program (DEIP);
Increasing Market Access Program (MAP) funds;
Fixing the statutory mandatory inventory and price reporting language to prevent further costly reporting errors by the USDA, and;
Requiring dairy importers to pay their fair share into the National Dairy Board for promotion and research projects.
“Our organization has worked very hard for more than a year to develop this portfolio of dairy provisions for the upcoming Farm Bill,” said Jerry Kozak, President and CEO of NMPF. “The fact that these items were passed by both the House, and now the Senate, means we will have a solid platform for dairy policy in the next few years.”
There are some differences between the House and Senate Farm Bill versions, including the countercyclical dairy program. The new program would provide government payments totaling up to $500 million to dairy farmers in 12 Northeastern states (CT, DE, MA, MD, ME, NH, NJ, NY, PA, RI, VT, and WV). Producers in those states would receive government payments whenever the monthly Class I price drops below $16.94/cwt., based on a Class I utilization rate of 45%.
In the rest of the country, farmers would receive a payment representing 40% of the difference between the previous quarter's all-milk price, and the five-year average all-milk price for that same quarter (when the second figure is higher than the first). The Senate bill allocates up to $1.5 billion for payments made using this formula in the remaining 38 states. Under both programs, payments would be made on up to eight million pounds of annual production (primarily affecting herds with approximately 400+ cows), with no payments for milk produced beyond that amount. Both programs would run through Fiscal Year 2005.
“Although NMPF had reservations about the differing formulas used to pay out the money, including the production caps, we are pleased that the Senate recognized the need to put more money in the pockets of dairy farmers across the country through the new Farm Bill,” Kozak said.
The $2 billion dairy payment program is not contained in the House version of the 2002 Farm Bill, meaning that when House and Senate leaders meet to develop a conference report on the Farm Bill, they will have to negotiate a significant compromise on the national dairy program. Once that compromise is reached, the conference version will again need to be approved by the House and Senate, respectively, before being sent to the White House for the President's signature.
The National Milk Producers Federation, headquartered in Arlington, VA, develops and carries out policies that advance the well-being of U.S. dairy producers and the cooperatives they collectively own. The members of NMPF’s 30 cooperatives produce the majority of the U.S. milk supply, making NMPF the voice of 60,000 dairy producers on Capitol Hill and with government agencies.