Washington D.C. (May 8, 2009) – As dairy farmers across the country confront their most catastrophic conditions since the Great Depression, the Dairy Subcommittee of the National Family Farm Coalition applauded the recent introduction of the “Federal Milk Marketing Improvement Act of 2009” (S. 889) by Senators Arlen Specter and Bob Casey. A previous version of the bill, S. 1722, had been introduced in 2007 as NFFC was one of the few farm groups to call for a change to a broken dairy pricing system. NFFC Dairy Subcommittee chairman Paul Rozwadowski, a Wisconsin dairy farmer, said, “NFFC tried to warn Congress that the dairy industry was in crisis all throughout the Farm Bill and unfortunately, Congress did not listen. Now dairy prices have collapsed to 1970 levels and thousands of dairy farmers are in danger of extinction. S. 889 offers a real opportunity for us to fix our pricing system and finally give farmers a cost of production for their hard work.”

S.889 would have two classes of milk and would price milk based on a national cost of production. All manufactured milk will be classified as Class II milk. The values of Class I milk will be determined by adding the existing Class I differential in each Federal or state market to the Class II price. For instance, in Federal Order #1, if the Class II price were $21.00 per cwt, then adding the Order #1 Class I differential of $3.25 per cwt would establish a Class I price of $24.25 per cwt. The price paid to dairy farmers would be slightly over $22.00 per cwt. Currently, dairy farmers are receiving as low as $9 per cwt for their milk.

S.889 calls for all state orders to use the same Class II price as the federal orders use. This includes California, which is currently not part of the Federal Order.

Arden Tewksbury, a Pennsylvania dairy farmer and director of Progressive Agriculture, said, “I have never seen such appalling conditions for our dairy farmers and it is not due to overproduction and the myth of ‘too much milk.’ Corporate greed and corruption in our pricing system and at the Chicago Mercantile Exchange and cheap milk protein concentrates (MPC) imports are responsible for the current devastating situation in rural America. S.889 would ensure we can still keep alive our remaining 60,000 dairy farmers. Without a domestic dairy industry, we will become reliant on places like China for our food security needs.” S.889 would institute a supply management program only when the value and volume of exported dairy products equals the value and volume of imported dairy products.

NFFC has continually criticized the failure of National Milk Producers Federation for failing to fight on behalf of America’s dairy farmers. NMPF has instead tried to utilize its ineffective Cooperatives Working Together program to slaughter more cows as a way to raise the price of milk. NMPF refuses to acknowledge the failures of the current pricing system that included one of their associate members, Dairy Farmers of America, to be fined $12 million for price manipulation.

In addition to the introduction of S. 889, dairy farmers need emergency relief now. NFFC has advocated temporarily for

* an emergency price floor of $18 cwt. for all manufactured milk
* an increase the “MILC” payments up to 100 % of dairy farmers’ losses on fluid milk