Dairy Price Support Increase in the Offing?

July 29, 2009 07:00 PM
Rumors have been circulating both inside and outside the Washington Beltway that USDA is planning to raise dairy price supports, at least temporarily. A statement bySen. Russ Feingold (D., Wis.) yesterday does not confirm the rumor, but suggests such changes are being considered.
The Feingold statement also suggests processors such as Dean Foods might want to ensure their books are in order if the U.S. Justice Department comes calling.
Feingold met with USDA Secretary Tom Vilsack earlier this week and released the following statement:
"All year long, dairy farmers from Wisconsin have had to watch milk prices drastically decline, while farming costs remain high.  This situation has farmers in Wisconsin and across the country facing significant losses.  Even with the improved Milk Income Loss Contract program and actions taken this spring by the USDA, the continuing crisis calls for emergency action.  I was encouraged by Secretary Vilsack's response to our request and I understand the USDA is currently working with the Office of Management and Budget to find ways to provide additional relief to dairy farmers. 

"I also received a commitment from Secretary Vilsack that USDA would be willing to collaborate with the Antitrust Division at the Department of Justice to improve competition in agriculture.  Earlier this year, I asked the Justice Department to examine whether the increased concentration at the cooperative, processor and retail levels is leading to increased margins in the middle and harming both dairy farmers and consumers.  As farm level prices have fallen, retail level prices for dairy products have often not followed suit and profits have even soared for some dairy processors.  Systemic problems like this within the dairy industry must be examined.  I am pleased that in response to my requests, the Justice Department intends to increase communication and coordination with other federal and state agencies while they examine these issues and that USDA is willing to work with them.  I will continue to closely monitor these issues and make sure we are doing all we can to help America's dairy farmers stay afloat in this tough economy.”

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