WASHINGTON, June 1, 2004 -The U.S. International Trade Commission's (USITC) Conditions of Competition for Milk Protein Products in the U.S. Market report, released May 18, 2004, reached a questionable conclusion. The Commission found, "The effect of imported milk proteins on farm-level prices depends on whether the market price for SMP (skim milk powder) is at, or above, the support price."

Support price means the price the government pays for SMP. The government reduced this price twice in the past year and a half because of growing government stockpiles of SMP. The USITC report states, "In summary, the analysis presented above suggests that imports of milk protein products may have contributed to the buildup of CCC stocks during 1996-2002."

Experts as well as the data published in this report indicate the cost to produce milk is greater than the support price. Therefore imports of dairy proteins, such as milk protein concentrate (MPC), reduced farm milk price to less than the cost of production.

Perhaps what is more important about the Conditions of Competition for Milk Protein Products in the U.S. Market study are the questions the Senate Finance Committee, chaired by Sen. Charles Grassley (R-Iowa), did not ask USITC to examine.

The responsibility of the Senate Finance Committee, and ultimately the USITC, is to preserve the public's interest.

Nowhere in the Committee's charge to the USITC is the public's interest raised. Nowhere in the entire 409-page report is the public's interest mentioned. Translated, competition means large corporations used cheaper ingredients not even approved by the Food and Drug Administration (FDA).

Since the Commission found corporations used 62 percent of imported MPCs in processed cheese, it is enlightening to find that the Bureau of Labor Statistics data reveals these savings were not passed on to the public at the retail level. In other words, corporations retained all benefits derived from competition.

Meanwhile, in the time period examined (1996-2002), America lost 31,710 dairy farms. Most of these farms were traditional family farms, which are symbolic of core American values. The greatest problem with this report is not the fact that USITC muddled data and conclusions. What is truly tragic is that the report never came close to examining what is important to America and its food supply.