Washington D.C. (September 25, 2007) - Dairy producer groups from diverse regions of the country released a letter today to the Senate Agriculture Committee expressing the urgent need for a cost of production for dairy farmers to be included in the Farm Bill. While recent higher milk prices have offered some relief to the remaining 60,000 dairy farmers in the United States, the situation for many is still dire due to last year's record low prices and the extreme price volatility that exists in the market.

Dairy groups from California to the Midwest to the Northeast, in contrast to previous regional "dairy wars," outlined a united agenda in the letter that included

1) A cost of production formula for dairy farmers who have seen fuel and feed costs spiral
2) Prohibiting forward contracting that will allow processors to pay farmers below the FMMO price and control more of the market
3) Ensuring transparency in milk pricing that addresses the nonfat dry milk price misreporting scandal and antitrust abuses as uncovered by the Department of Justice
4) Maintain current definitions of milk and prohibit substitutes such as milk protein concentrates (MPC) and casein

In addition to the letter, dairy farmers from Wisconsin, New York and Pennsylvania took time off from their busy farm lives and came to Washington D.C. on September 25 to meet with Senate members and staff to line up support for the Federal Milk Marketing Improvement Act of 2007, S. 1722, introduced by Senator Arlen Specter (R-PA) and Senator Bob Casey (D-PA). To date, it is the only bill introduced in Congress that addresses a cost of production for dairy farmers.

Dairy farmers from across the country said they were gratified that Senate staff took seriously their outlining the distressed state of the dairy industry:

Joel Greeno, a dairy farmer from Wisconsin and president of American Raw Milk Producer Pricing Association, said, "S. 1722 finally gives farmers a fair price for all regions. In the past, there have been divisions that pitted region against region, using the Class I premium price as a wedge between Northeastern and Midwestern farmers. Those days are over as all farmers, regardless of region or herd size, cannot survive another year like 2006."

Arden Tewksbury, Pennsylvania dairy farmer and manager of Progressive Agriculture Organization (Pro Ag), said, "This is the best bill for dairy farmers I have seen in my lifetime and I am grateful to Senators Specter and Casey for their leadership in ensuring the survival of our last remaining dairy farmers."

Floyd Hall, a dairy farmer from New York, warned, "If nothing is done to change dairy policy in this Farm Bill, our 5,300 dairy farms in New York will be done for. We need price stability. The market may be good for now, but could crash at any time without a cost of production."

Donna Hall, a dairy farmer from Pennsylvania, hailed the bill as vital for consumers, given the nation's dairy deficit and industry's increasing reliance on inferior and illegal dairy substitutes such as milk protein concentrates (MPCs): "The FDA has never approved the use of MPCs in our food system, but companies are already importing MPCs from foreign countries and using them in dairy products. Consumers are beginning to question and reject foreign imports. S. 1722, by helping dairy farmers survive, will also ensure our domestic food security."

California dairy farmers who visited Capitol Hill last week expressed their support for S. 1722, along with informing Senators of their opposition to dairy forward contracting. "The forward contracting legislation in the House farm bill would take us back to a time when milk was totally unregulated," stated California Farmers Union (CFU) President Joaquin Contente. "We would repeat a history that has proven an unregulated dairy market does not work for producers or consumers," he added. "It will transfer tremendous market power to milk processors and enable them to depress producer prices and maintain high consumer prices for years to come," he concluded.

The Federal Milk Marketing Improvement Act proposes:

1) All milk produced in the United States will be priced based on the national average cost of production.

2) All milk used for manufacturing purposes will be classified as Class II milk.

3) The value of Class I milk will be the same across the United States.

4) The Class II price will be the Basic Formula Price for all markets in the United States.

5) Dairy farmers' prices will be adjusted four times a year.

6) All federal and state orders will determine the amount of adjustments for pricing butterfat, etc.

In addition,

7) The proposal allows the USDA to implement a supply management program. This can only be implemented when the value of exported dairy products equals the value of imported dairy products.

8) The proposal does not allow any hauling costs to be charged to dairy farmers.

9) The proposal does not allow any make allowance cost to be charged to dairy farmers.