Farm Bill dairy debate continues

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Dairy provisions of the new Farm Bill continued to be offered up at a furious pace this past week as House and Senate members try to find a workable compromise.

So far, the following items have been agreed upon:


  • Reauthorization of the Dairy Export Incentive Program.
  • Modifications to the MilkPEP Program.
  • Clarification of mandatory price reporting language.
  • Repeal of the Recourse Loan Program for processors.
  • Funding for two studies on: The impact of eliminating the federal order and price support program and replacing them with state authority over milk pricing. And, the impact of establishing a minimum standard of identity for protein commensurate with the average protein content of milk produced in the U.S.
  • Johne's disease control program.


The provisions that remain unsettled are the dairy price support program; promotion assessment on imported dairy products; direct payments; and conservation programs, including the Environmental Quality Incentives Program.

Although both the House and Senate passed provisions to extend the price support program, it has not been approved by conferees because funding for the direct payment program has not yet been finalized. That’s because one idea on the negotiating table would use the funding for the dairy price support program to make direct payments to producers.

Proponents of direct payments prefer to keep the $773 million set aside in both the House and Senate Bills for the price support program on the table until an agreement on direct payments is reached. Negotiations continue at the staff level but a deal has not been reached.

Here’s a few of the ideas currently being considered on a dairy subsidy program.

  • The original Senate proposed program with separate options for Northeast producers and all other producers.
  • The Stenholm/Peterson plan that pays 25% of the difference between the current national “all-milk” price and a $14.79/cwt on average base milk marketings in 1999-2001 with a reduction in payment for growth.
  • A proposed compromise would pay 34-cents/cwt when the national average all-milk price falls below a rolling five-year average all-milk price with 14 million pounds of milk eligible for payments annually.
  • Another plan would pay 45% of the difference between the monthly Class I price in Boston and $16.94 on 1.8 million pounds of milk annually. This plan is gaining favor because of the lower risk of a production response resulting from the payment that could lower milk prices.
  • An idea being floated to accompany one or more of these plans listed would allow multiple individuals associated with single operations to be eligible for the direct payments.


Western United Dairymen


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