Casey introduces Dairy Advancement Act

U.S. Sen. Bob Casey (D-Pa.) introduced the Dairy Advancement Act (S. 1682), at least the fifth bill addressing federal dairy policy reforms introduced in Congress in the past couple of weeks. According to Casey, the bill is designed to improver producer revenues, encourage exports and new product development, and make milk pricing more transparent and easier to understand.

 

The bill makes no mention of supply management.

 

The Dairy Advancement Act would give dairy producers a choice in risk management tools by allowing them to continue to participate in the Milk Income Loss Contract (MILC) program, or to receive support for Livestock Gross Margin-Dairy (LGM-Dairy) program by insuring their revenue margins for future months. LGM-Dairy insurance would be subsidized at the $1.50 deductible level for not more than 3 million lbs. of milk per year. Supplemental coverage would be available for producers who wish to purchase it.

 

This bill repeals the Dairy Product Price Support Program. To help dairy processors transition away from producing products purchased under that program, the bill makes low-interest loans available to manufacturers so they can retrofit plants and shift their focus to products that have broader, global  demand. The loan program would be capped at $15 million each fiscal year.

 

This bill encourages milk pricing reform by simplifying the current federal order four-class system to two classes – fluid and manufacturing. Under the proposal, the U.S. ag secretary must propose a federal order reform amendment to Congress at least 6 months prior to deadline of Sept. 30, 2014.  USDA must also carry out an economic assessment of the milk-feed price ratio, and of any proposed changes in the federal milk marketing orders.

 

The proposal seeks to improve dairy price and volume reporting by expanding the reportable commodities and increasing reporting  frequency. The proposal requires daily, weekly and monthly reporting of commodities by processors and USDA, when applicable, and requires USDA to audit the reports.

 

IDFA response

Connie Tipton, International Dairy Foods Association president and CEO, called the proposal a step in the right direction, and threw a challenge into the National Milk Producers Federation’s (NMPF) court.

 

"Now we are getting somewhere,” she said. “The Dairy Advancement Act, offered by Senator Casey, moves the dairy industry towards consensus on a path forward. Most importantly, the bill will not hamstring our industry with a new government program to limit milk supply as does the (U.S. Rep. Collin) Peterson (Dairy Security Act) proposal. It sets no limits on the ability of dairy farmers to grow their businesses, and offers a safety net without strings attached.  

 

"Although this bill moves us in the right direction, the unwillingness of the NMPF to compromise and insist on proposals that will constrain the industry by limiting milk supply is disappointing,” Tipton continued. “NMPF continues to refuse to seek consensus by insisting on the Peterson proposal that forces dairy producers to accept supply controls if they want to participate in margin insurance.”