2007 Farm Bill Holds Surprises For Dairy Industry

US - The Bush Administration’s plan for the 2007 Farm Bill held a couple of surprises for the dairy industry. As expected, the plan would continue the milk price support program at the current $9.90 per hundredweight level although Chris Galen with National Milk Producers Federation (NMPF) says there was some concern, “They would do something with butter-powder tilt, making frequent adjustments in the purchase price levels.”
calendar icon 1 February 2007
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A little surprise in that the plan extends the life of the Milk Income Loss Compensation (MILC) program. Funding for MILC is set to expire a month before the current farm bill runs out, creating a zero-budget line for the program which many saw as the end of the program.

The Bush plan continues MILC through the entire duration of the next farm bill but ratchets the payment level from 34% down to 20% over the period. The big surprise for dairy is a plan to implement the 15-cent per hundredweight promotion assessment on imported dairy products. Galen says this was actually included in the 2002 Farm Bill but never implemented because of WTO-compliance concerns.

That stems from the fact not all U.S. dairy producers pay the assessment, producers in Alaska, Hawaii and Puerto Rico are exempt. Galen says the plan is to impose the assessment on producers in Alaska, Hawaii and Puerto Rico, “And in so doing, also be able to impose the assessment on imported dairy products.” National Milk estimates that will mean an extra $10 million per year for the dairy checkoff.

“Most importantly, it makes certain that importers of things like cheese and milk protein concentrates are also helping to develop the market in the same way U.S. dairy farmers are with their 15-cent checkoff.”

Source Brownfield Network

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