Wisconsin Ag Connection - Lawmakers Urge USDA to Reject Unfair Dairy Pricing Plan

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Lawmakers Urge USDA to Reject Unfair Dairy Pricing Plan
Wisconsin Ag Connection - 01/31/2007

Three members of Wisconsin's Congressional delegation are calling on U.S. Agriculture Secretary Mike Johanns to reject changes to the federal milk marketing orders being considered by the USDA that could hurt the prices that Wisconsin dairy farmers receive.

Congressman Dave Obey, along with Senators Herb Kohl and Russ Feingold say the changes proposed by the National Milk Producers' Federation would significantly alter classified pricing formulas by increasing prices paid to dairy farmers who produce milk for the fluid milk market, while undercutting those who's milk goes to make cheese.

As part of the NMPF's plan, the USDA would move the make allowance for cheddar cheese to 16.82 cents per pound of cheese, up from the current value of 16.5 cents. They would also raise the make allowance to produced dry whey to 19.56 cents per pound, up from 15.9 cents. The make allowance to produce butter would rise about one-half cent to 12.02 cents per pound and the cost of making nonfat dry milk rose from 14 cents to 15.7 cents per pound.

In their letter to Secretary Johanns, the lawmakers noted that the NMPF proposal has the potential to reignite regional conflict within the dairy industry and it could 'lead to the unraveling of federal milk marketing orders.'

"For years, farmers in Wisconsin and Minnesota have suffered under outdated federal milk marketing orders that keep prices for milk that goes into fluid use high while paying farmers outside the Upper Midwest more for their milk through Class I dairy differentials," Obey said. "Instead of considering proposals to bring regulation of dairy markets into the 21st century, USDA is considering a plan that would exacerbate the inequities and increase the market distortions caused by the archaic federal orders."

Kohl says the proposal threatens financial harm to Wisconsin dairy families.

"Our dairy farmers deserve fair treatment," the Milwaukee Democrat said. "Fairness dictates that the USDA should reject this ill-conceived proposal."

Feingold says the proposal would put Wisconsin dairy farmers at an unfair disadvantage, especially when they already have to put up with a flawed pricing system that provides a higher price for milk based on the distance from the Eau Claire region of the Upper Midwest.