On Wednesday, the U.S. Senate passed an amendment to 2012 Farm Bill that sets up a process for amending the federal milk marketing order system. The amendment passed by a vote of 66-33.

Specifically, the amendment would allow dairy industry groups to present milk-pricing reforms to the U.S. Department of Agriculture for consideration in a public hearing setting, and order the Secretary of Agriculture to release the Department’s final proposal to Congress.

“Our amendment does not prescribe a solution; rather, it initiates a process by which the USDA would create a new federal dairy pricing program,” said U.S. Sen. Olympia Snowe (R-Maine), co-sponsor of the amendment. 

Chris Galen, senior vice president of communications at the National Milk Producers Federation, told AgriTalk radio on Thursday that "things look really good."

"Our concern has been that we have a new dairy reform program included in the Farm Bill, and what we supporting has basically emerged intact in the Senate Farm Bill," he said. "Assuming we get final passage later today, we'll be very happy with the final package that the Senate passes."

Then, it is on to the U.S. House of Representatives.

Galen said the next priority of NMPF will be to see that provisions of the Dairy Security Act get included in the House Agriculture Committee mark-up of the Farm Bill, which is scheduled for July 11. 

The Dairy Security Act would provide payments to farmers when the margin between milk prices and feed prices gets really tight. It would be a voluntary program, but the farmers who do sign up would be subject to production limitations -- under the "market stabilization" provision -- in periods of tight margins.

For more on the Farm Bill, see this story from Reuters.