National Dairy Policy Reviewed by Subcommittee

May 22, 2001

National Dairy Policy Reviewed by Subcommittee

(May 22, 2001)

Representatives of the nation's dairy industry took a seat at the witness table before the Subcommittee on Livestock and Horticulture this morning. Subcommittee Chairman Richard W. Pombo (R-CA) convened the hearing in order to facilitate a discussion of the ongoing reform of the dairy industry and the upcoming farm bill.

"America's dairy policies are a complicated patchwork involving many economic and regional variables. The reform of federal dairy policy, and the desire to transition to a more market-oriented approach to dairy, has been a focus of this Subcommittee," said Pombo.

The dairy industry presented a wide range of opinions, relating to many areas of the national dairy policy. Among the areas that were examined included the dairy price support program (DPSP), purchase price relationship between butter and nonfat dry milk under the DPSP (i.e. tilt), and the Dairy Export Incentive Program (DEIP).

Price Supports
* The majority of groups testifying before the Subcommittee support extending price supports at the current $9.90 level. To do so, the witnesses maintained, would be to make the dairy program consistent with other commodity groups and maintain a safety net for producers.

* Support was nearly evenly split among the witness as to whether commodity purchase prices should remain stable, or be adjusted.

* The majority of groups testified that the DEIP should be extended. "The DEIP is a program that helps dairy exporters develop new markets and compete in markets where the U.S. faces stiff competition.

Reflecting on the hearing, Ranking Member Collin Petersen (D-MN) said "Today's hearing moves us closer to addressing the current needs of America's dairy farmers as we begin to write the next farm bill."

The following organizations were represented before the Subcommittee: American Farm Bureau Federation, Western United Dairymen, Milk Producers Council, International Dairy Foods Association, The Alliance of Western Producers, Southeast Milk, Inc., Texas Association of Dairymen, and the Select Milk Producers, Continental Dairy Products, and Elite Milk Producers.

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