Missouri Dairy Business Update  
Volume 8, Number 6
June 2008

U.S. Farm Bill Implications for Dairy

University of Wisconsin has published a paper detailing the ramications of the passed 2008 USDA Farm Bill for the U.S. dairy industry. Some of the highlights of 2008 Farm Bill for dairy include (excerpted from the actual paper):

• The Milk Price Support Program is re-named the Dairy Product Price Support Program. USDA continues to purchase butter, nonfat dry milk and cheddar cheese to at the same prices applicable under previous legislation, but the prices are no longer linked to a support price for milk.

• The Milk Income Loss Contract (MILC) program is reauthorized and altered to adjust the Class I target price using changes in feed costs. The portion of the amount by which the market price falls short of the target price that is paid out on eligible milk is raised from 34 to 45 percent and the production cap is raised from 2.4 million pounds annually to 2.985 million pounds.

• The farmer-funded dairy promotion program is changed to require assessments be collected from previously-exempted dairy farmers in Alaska, Hawaii and Puerto Rico. Imports will be assessed at a rate one-half the rate applying to U.S. milk production.

• The Dairy Forward Pricing program that operated on a pilot basis from 1999 through 2004 is reinstated as part of the new Farm Bill.

• The Dairy Export Incentive Program (DEIP) and the Dairy Indemnity Program are extended intact.

• USDA is required to establish an electronic system for mandatory reporting of dairy product inventories and sales information and to increase the frequency of reporting once the electronic reporting system is operational.

• USDA is required to take steps to expedite the process of amending Federal Milk Marketing Orders.

• USDA is required to study the impact of trade misreporting of nonfat dry milk prices and sales volume on Federal Order minimum prices.

• Congress created a Federal Milk Marketing Order review commission to evaluate current federal and state milk pricing regulations and provide related recommendations for change to Congress.

Dairy Subtitle: Food, Conservation, and Energy Act of 2008
(Complete University of Wisconsin Report)

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