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Kohl, Feingold Urge Boosting Dairy Price Support Program Prices
Wisconsin Ag Connection - 07/16/2009

Wisconsin's two U.S. senators are urging the USDA to increase purchase prices under the federal Dairy Price Support program. In a letter to U.S. Agriculture Secretary Tom Vilsack on Wednesday, Senators Herb Kohl, Russ Feingold and Patrick Leahy of Vermont asked the agency to consider modifications to the DPSP as a means of addressing acute problems in dairy markets.

"America's dairy producers are facing the worst prices in nearly 30 years. Dairy farmers from every region of the country are losing money each month which is jeopardizing the long term stability of the industry and the livelihood of thousands of our rural communities," the letter stated. "We appreciate your actions to implement the Dairy Export Incentives Program and your recent comments supporting additional lending opportunities for dairy producers. Despite those welcome actions, we believe more aggressive action is needed to halt the current crisis."

The memo went on to say that the recently enacted farm bill updated the price support program to set price floors under individual dairy products, such as butter, cheese and non-fat dry milk. While specific prices at which USDA is mandated to purchase product were included in the legislation, the senators say Congress clearly gave the USDA the authority to increase the purchase prices if necessary.

"We are therefore urging you to temporarily increase the Dairy Price Support program products purchases by a significant level to restore a meaningful safety net for America's dairy farmers," the three Democrat lawmakers said.

During January through April this year, the U.S. all-milk price has averaged $4.80 per cwt. below the U.S. average cash cost of production. And in the months since, dairy farmers have continued to lose significant equity. The senators say a meaningful, but temporary, increase the Dairy Price Support program will begin to restore farm level prices and help restore producer's ability to cash flow their operations during these difficult financial times.

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