The Dairy Policy Action Coalition is pleased to see Congress moving forward on mandatory electronic price reporting for dairy via the Senate Agriculture Appropriations Bill and through language included in the House and Senate Agriculture Committees’ reauthorization of existing electronic reporting for beef and pork.
“Testimony at the USDA / DOJ Dairy Competition Workshop in Madison, Wis. last month identified the CME cash cheese exchange as being too thinly traded and not a good price discovery vehicle,” said DPAC chair Cliff Hawbaker, a dairy producer from Chambersburg, Pa. “We are pleased to see Congress taking important steps in the right direction to establish electronic reporting for dairy, and we urge lawmakers and USDA to continue moving forward to achieve price reporting that is daily, not weekly, and which reflects more of the products in the marketplace that are made with the milk produced by America’s dairy farmers.”
On Tuesday, July 27, the House Ag Committee passed H.R. 5852—The Mandatory Price Reporting Act of 2010. The five-year reauthorization bill directs USDA to establish an electronic reporting system for dairy products within one year of passage.
“Mandatory price reporting programs ensure that producers have access to transparent, accurate and timely market information that helps them make the best decisions for their businesses,” said chairn Collin Peterson (D-Minn.), who introduced H.R. 5852, in an official statement about the committee’s approval of it.
On July 28, Senate Ag Committee chair Blanche Lincoln (D-Ark.) and ranking member Saxby Chambliss (R-Ga.) introduced a bill with similar language for dairy, stating that the purpose of the Act is to “guarantee transparency… and help improve producers’ ability to access fair market prices.” (According to the National Milk Producers Federation, that bill was approved by the Senate Ag Committee, Aug. 4.)
While the reporting is daily for wholesale beef cuts—and the new mandate for wholesale pork cuts is also daily—the new language on reporting for wholesale dairy products, on the other hand, is described as weekly in H.R. 5852, and would be released every Wednesday for the previous week’s sales.
The Senate Appropriations Committee, on July 15, also included a section on Dairy Price Reporting within its Agriculture Appropriations bill, encouraging the Secretary of Agriculture to consider the recommendations of the Dairy Industry Advisory Committee (DIAC) regarding implementation of Section 1510 of the 2008 Farm Bill, which already provides the authority for electronic reporting of dairy products that is “more frequent” (daily) versus weekly, and auditing the reports quarterly instead of yearly.
The July action by the Senate Ag Appropriations Subcommittee, chaired by Sen. Herb Kohl (D-Wis.), follows a May 3, 2010 letter authored by Sen. Arlen Specter (D-Pa.), a member of the Subcommittee, and Rep. Tim Holden (D-Pa.), vice-chair of the House Ag Committee, and signed by 24 members of Congress from 12 states. The letter conveyed bipartisan support for the inclusion of $1 million to fund the “more frequent” electronic reporting system.
“Congress wrote Section 1510 into the last Farm Bill, with the words: ‘pending funding.’” said Dennis Wolff, a consultant for DPAC who worked on this issue as a former state ag secretary and who is also a lifelong dairy farmer. “DPAC has been working to move that funding forward so this section of the last Farm Bill can be implemented.”
According to Dairy Industry Advisory Committee (DIAC) vice-chair Erick Coolidge, who was in Elizabethtown, Pa. for a community forum hosted by the local Grange on July 27, the DIAC’s subcommittee on dairy profitability meets in Washington D.C. next week, and dairy price reporting is on the agenda.
In June, Wolff and DPAC vice-chair Rob Barley, a dairy producer from Lancaster, Pa., presented DPAC’s “Cornerstone for Change” to the full DIAC at their second meeting in Washington, D.C. The primary focus of their comments was market transparency and price discovery and the role of daily electronic reporting to improve the timeliness and accuracy of USDA-reported prices and sales volumes for wholesale dairy products.
According to the DIAC June meeting minutes, USDA officials said the cost to dairy processors is estimated at $381 per plant per year to electronically submit sales data on a daily basis, as is currently done by beef processors.
“The value centers in the dairy industry are changing with new products and new uses,” said Barley. “To make business decisions as dairy producers, we need price reporting that reflects daily negotiated trades, not a volatile and thinly-traded CME exchange, where less than one percent of U.S. cheese and less than 2% of U.S. butter is traded. Under the current system, this market of last resort is captured in the weekly NASS Survey that is a week old by the time we farmers see it.”
DPAC is a coalition of grassroots dairy producers actively participating, with a unified voice, in the policies and issues affecting milk pricing. The coalition, formed in November 2009, is organized into action groups and is funded by donations to represent the grassroots community of dairy farmers across the U.S. DPAC has a 20-member charter board made up of active dairy producers from Pennsylvania, Ohio and New York, along with ad hoc members—to-date—from Maryland, Virginia, Tennessee, Kentucky, Georgia, Indiana, and Wisconsin. They have contracted the consulting services of Dennis Wolff, a former state ag secretary and lifelong dairy farmer who is now a partner in Versant Strategies. DPAC is corresponding with producers and organizations in 23 states. In its first eight months of existence, the coalition has received donations by individual dairy farmers and producer organizations, accounting for a combined 6,500 dairy producers in 12 states. DPAC has also received substantial donations from agribusinesses that supply and provide services to the nation’s dairy farms. Combined, these contributing businesses account for thousands of jobs. For more information, visit www.dpac.net or call 800.422.8335.