The International Dairy Foods Association (IDFA) sent a letter to Secretary of Agriculture Tom Vilsack urging him to avoid or delay the impact of a 1949 law that could raise milk prices significantly. The letter pointed out legal options the government could use to steer clear of this so-called “dairy cliff,” which could have a dire effect on the consumers’ budgets.
IDFA’s letter noted Vilsack’s power to avoid raising milk prices, which would give Congress more time to complete a new farm bill early next year. With the expiration of the 2008 Farm Bill on Dec. 31, the U.S. Department of Agriculture will have to revert to what the Washington, D.C. trade association describes as “outdated, underlying laws that don’t reflect current market conditions or international trade in dairy products.” Because the USDA doesn’t have regulations to implement the old law, the agency will have to create new ones through a process that could take several weeks or months, according to IDFA.
“Although a sudden and unpredictable increase in milk prices may result in a short-term financial windfall to dairy producers, the immediate implementation of the 1949 act would dramatically increase government spending, would force consumers to pay significantly more for dairy products and would impose long-term damage to the dairy industry,” the letter said.
Congress has not been able to agree on a new farm bill and will probably have to pass an extension of existing law, as they have done for most farm legislation passed in the last 30 years, IDFA noted.
“In the event that no action is taken by Congress prior to the end of the year, we urge you to consider other legal authorities that are available to mitigate the impact of the 1949 act,” the group’s letter said. “If you conclude that you are required to proceed with implementation, we urge that you proceed in a thoughtful and deliberate manner using the formal rulemaking process. This will enable stakeholders, not just dairy producers and processors, but also food manufacturers, food retailers, consumers and others, to voice their concerns prior to the implementation of any new rule.”
The organization backs policies that would grant dairy farmers access to USDA-subsidized insurance, similar to what’s currently available to grain farmers and other agriculture sectors. IDFA opposes any new policies that would require the government to artificially raise milk prices, such as implementation of the 1949 act and those in the Dairy Market Stabilization Program included in the proposed farm bill. IDFA has declared its support for a bipartisan measure offered by Reps. Bob Goodlatte (R-Va.) and David Scott (D-Ga.) that would offer subsidized revenue protection for dairy farmers without government management of milk prices.
“This type of situation is not new, as farm bills have been extended many times,” observed IDFA president and CEO Connie Tipton. “The Secretary of Agriculture has ample authority to postpone and even avoid any negative impact of a delay in passing a new farm bill, and we expect USDA will take careful and deliberate actions to avoid short-term market disruptions.”
Made up of three constituent organizations, the Milk Industry Foundation (MIF), the National Cheese Institute (NCI) and the International Ice Cream Association (IICA), IDFA has 220 dairy-processing members ranging from large multinational organizations to single-plant companies. Together, they represent more than 85 percent of the milk, cultured products, cheese and frozen desserts produced and marketed in the United States.