1.Repeal
of dairy price support program
(a)Section 1501 of the
Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7981) is
repealed.
(b)Section 1507 of the Farm Security and Rural Investment
Act of 2002 (7 U.S.C. 7983) is repealed.
2.Milk target price
programSection 1502 of the
Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7982) is
amended—
(1)by striking the section heading and
inserting Milk target price
program
;
(2)in subsection
(a), by striking paragraph (1) and inserting the following:
(1)The term Class III milk means milk (including
milk components) classified as milk for manufacturing purposes under a Federal
milk marketing
order.
;
(3)by striking
subsection (c) and inserting the following:
(c)
(1)Subject to paragraph (3), payments to a producer under
this section shall be calculated by multiplying (as determined by the
Secretary)—
(A)the payment
quantity for the producer during the applicable month established under
subsection (d); by
(B)the amount equal
to—
(i)$12.00 per
hundredweight (as adjusted under paragraph (2)); less
(ii)the Class III
milk price per hundredweight under the applicable Federal milk marketing
order.
(2)Feed price
index and adjustment factor
(A)The Secretary shall develop a feed price index, using a
baseline period of calendar years 2001 through 2005, to reflect the feed cost
of producing 100 pounds of milk.
(B)The Secretary shall establish a feed adjustment factor
that reflects changes in the feed price index, as determined by the
Secretary.
(C)Each
month that there is an increase in the feed price index, the Secretary shall
adjust the amount described in paragraph (1)(B)(i) to reflect any increases in
the feed adjustment factor.
(3)The maximum annual payment for all producers on a single
dairy operation during the months of the applicable fiscal year for which the
producers receive payments under this section shall not exceed
$50,000.
;
and
(4)in subsections
(f) and (g)(1), by striking September 30, 2007
both places it
appears and inserting September 30, 2012
.
3.Subtitle E of title I
of the Farm Security and Rural Investment Act of 2002 (7 U.S.C. 7981 et seq.)
is amended by adding at the end the following:
1509.
(a)The
Secretary shall carry out a nationwide program under similar terms and
conditions as the Secretary used to carry out the dairy options pilot program
established in accordance with section 191 of the Federal Agricultural
Improvement Reform Act of 1996 (7 U.S.C. 7331).
(b)
(1)Commodity
Credit CorporationThe Secretary shall use the funds, facilities,
and authorities of the Commodity Credit Corporation to carry out this
section.
(2)Of the funds of the Commodity Credit Corporation, the
Secretary shall use to carry out this section $25,000,000 for each of fiscal
years 2008 through 2012, to remain available until expended.
(3)To the maximum extent practicable, the Secretary shall
operate the program in a budget neutral
manner.
.
4.Recourse loan program
for commercial producers of dairy productsSubtitle E of title I of the Farm Security
and Rural Investment Act of 2002 (7 U.S.C. 7981 et seq.) (as amended by section
3) is amended by adding at the end the following:
1510.Recourse loan program for commercial
producers of dairy products
(a)Definition of eligible dairy
productsIn this section, the term eligible dairy
products means cheddar cheese, butter, and nonfat dry milk.
(b)Effective
beginning on September 30, 2007, the Secretary shall make recourse loans
available to commercial processors of eligible dairy products—
(1)to assist the
processors to manage inventories of eligible dairy products; and
(2)to ensure a
greater degree of price stability for the dairy industry.
(c)
(1)The Secretary shall establish a loan rate for eligible
dairy products, that reflects a milk equivalent value of $9.90 per
hundredweight of milk containing 3.67 percent butterfat, as determined by the
Secretary.
(2)The
Secretary shall charge a processor that receives a recourse loan under this
section a rate of interest that is not less than the rate of interest that the
Secretary of the Treasury charges the Commodity Credit Corporation, as
determined by the Secretary.
(d)
(1)The original term of a recourse loan made under this
section may not extend beyond the end of the fiscal year in which the loan is
made.
(2)At
the end of a fiscal year, the Secretary may extend a recourse loan for an
additional period not to exceed the end of the next fiscal
year.
.
5.Milk revenue insurance
pilot programSection 523 of
the Federal Crop Insurance Act (7 U.S.C. 1523) is amended by adding at the end
the following:
(f)Milk revenue
insurance pilot program
(1)During each of crop years 2008 through 2012, the
Corporation shall carry out a pilot program under which producers on a dairy
farm may elect to receive insurance against loss of revenue due to natural
disasters and price fluctuations, as determined by the Corporation, based on
the average revenue received by producers for each cow during the 5-year period
ending the preceding crop year .
(2)The
Corporation shall carry out the pilot program under this section using similar
terms and conditions as were contained in the crop insurance policy proposal
entitled Milk Revenue Policy (from bovine animals)
submitted to
the Board on April 26, 2007, in accordance with section
508(h).
.
6.Federal milk
marketing orders
(a)2-class system
for classifying milk
(1)Not later than September 30, 2008, the Secretary of
Agriculture shall conduct a study of the economic benefits to milk producers of
establishing a 2-class system for classifying milk under Federal milk marketing
orders issued under section 8c(5) of the Agricultural Adjustment Act (7 U.S.C.
608c(5)), reenacted with amendments by the Agricultural Marketing Agreement Act
of 1937, consisting of a fluid milk class and a manufacturing grade milk class
(with the price for both classes determined using the component prices of
butterfat, protein, and other solids).
(2)If the Secretary determines (on the basis of the study
conducted under paragraph (1)) that a 2-class system for classifying milk under
Federal milk marketing orders would have a positive impact on milk producers,
the Secretary shall amend Federal milk marketing orders to implement the
2-class system for classifying milk.
(b)Deadline for
issuance of ordersSection 8c(4) of the Agricultural Adjustment
Act (7 U.S.C. 608c(4)), reenacted with amendments by the Agricultural Marketing
Agreement Act of 1937, is amended by striking After
and
inserting Not later than 30 days after
.
(c)Section 8c(5) of the
Agricultural Adjustment Act (7 U.S.C. 608c(5)), reenacted with amendments by
the Agricultural Marketing Agreement Act of 1937, is amended by adding at the
end the following:
(P)Not later than September 30, 2007, in calculating the
advanced price of Class I butterfat milk and Class I and II skim milk under
Federal milk marketing orders, the Secretary shall use the 4-week component
prices that are used to calculate prices for Class III and Class IV milk, as
determined by the
Secretary.
.
(d)Economic impact
assessmentThe Secretary of Agriculture shall—
(1)carry out a
review of the milk-feed ratio during the 1-year period ending on the date of
enactment of this Act; and
(2)not later than
September 30, 2008, and each time a proposed change in the Federal milk
marketing order formulas is considered by the Secretary—
(A)assess the
economic impact, over a 1- and 2-year period, of proposed changes in Federal
milk marketing order formulas on—
(i)milk
supply;
(ii)farm
profitability;
(iii)consumer
demand; and
(iv)market
prices;
(B)submit to the
Committee on Agriculture of the House of Representatives and the Committee on
Agriculture, Nutrition, and Forestry a report that describes the results of the
assessment; and
(C)consider, and
include in the record, the results of the assessment before making a decision
on any proposed change to the Federal milk marketing order formulas.
7.Dairy forward pricing
programSection 23 of the
Agricultural Adjustment Act (7 U.S.C. 627), reenacted with amendments by the
Agricultural Marketing Agreement Act of 1937, is amended—
(1)in the section
heading by striking pilot
;
(2)in subsection
(a)—
(A)by striking
Pilot program
required.—
and all that follows through
pilot
and inserting In general.—The Secretary of Agriculture shall
carry out a
;
(B)by striking
under which milk producers
and inserting “under which—
(1)milk
producers
;
and
(C)by striking
handlers.
and inserting “handlers; and
(2)proprietary
processors and cooperatives regulated under Federal milk marketing orders are
authorized to voluntarily enter into forward price contracts with the members
of the processors and
cooperatives.
;
(3)by striking
subsections (d) and (e); and
(4)by adding at the
end the following:
(d)
(1)Commodity
Credit CorporationThe Secretary shall use the funds, facilities,
and authorities of the Commodity Credit Corporation to carry out this
section.
(2)The Secretary shall use such funds of the Commodity Credit
Corporation as are necessary to carry out this section for each of fiscal years
2008 through 2012, to remain available until
expended.
.
8.Dairy processing
equipment loan guarantee fund
(a)
(1)Section 310B(a) of the Consolidated Farm and Rural
Development Act (7 U.S.C. 1932(a)) is amended—
(A)by designating
the first through fifth sentences as paragraphs (1) through (5),
respectively;
(B)by striking
Sec.
310B. (a) The Secretary
and inserting the
following:
310B.Rural
industrialization assistance
(a)
(1)The
Secretary
;
(C)by striking
for the purposes of (1) improving
and inserting “for the
purposes of—
(A)improving
;
(D)by striking
abatement and control, (2) the conservation
and inserting
“abatement and control;
(B)the
conservation
;
(E)by striking
rural areas, (3) reducing
and inserting “rural areas;
(C)reducing
;
(F)by striking
rural areas, and (4) to facilitate economic
and inserting “rural
areas;
(D)facilitating
economic
;
and
(G)by striking
foreign trade.
and inserting “foreign trade; and
(E)providing
processors of dairy products with incentives for investing in new equipment and
technologies by using not more than $15,000,000 each fiscal year to—
(i)make loans to
dairy processors and cooperatives to cover not more than 50 percent of the cost
of acquisition and adoption of new equipment, equipment upgrades, and new
technologies—
(I)at a fixed rate
of interest not to exceed the prime lending rate plus 1 percent; and
(II)with a term of
not to exceed 15 years; and
(ii)guarantee loans
made to dairy processors and cooperatives for the acquisition and adoption of
new dairy equipment, equipment upgrades, and new technologies, at a guarantee
rate of 90
percent.
.
(2)
(A)Section
307(a)(6)(B)(ii) of the Consolidated Farm and Rural Development Act (7 U.S.C.
1927(a)(6)(B)(ii)) is amended by striking clause (1) of section
310B(a)
and inserting section 310B(a)(1)(A)
.
(B)Section
333A(g)(1)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C.
1983a(g)(1)(B)) is amended by striking 310B(a)(1)
and inserting
310(a)(1)(A)
.
(C)Section
381E(d)(3)(B) of the Consolidated Farm and Rural Development Act (7 U.S.C.
2009d(d)(3)(B)) is amended by striking 310B(a)(1)
and inserting
310B(a)(1)(A)
.
(b)Lending power
for dairy processing cooperativesSection 3.7 of the Farm Credit
Act of 1971 (12 U.S.C. 2128) is amended by adding at the end the
following:
(g)Dairy
processing cooperatives
(1)The banks for cooperatives may use not more than
$15,000,000 each fiscal year to provide dairy processing cooperatives with
working capital lines of credit and accounts receivable financing for the
purpose of accessing export marketing opportunities for milk and milk
products.
(2)Financing
provided by the banks for cooperatives for a project under paragraph (1) may
not exceed the lesser of—
(A)$1,000,000;
or
(B)75 percent of the
costs of carrying out the project.
(3)
(A)Except as provided in subparagraph (B), the term of a
line of credit described in paragraph (1) shall not exceed 24 months.
(B)Revolving lines
of creditA revolving line of credit may be used for multiple
transactions.
(4)An accounts receivable financing loan under this subsection
shall be due on the earlier of—
(A)the date on which
the receivable is paid; or
(B)180 days after
the date of disbursement.
(5)
(A)Working capital
line of credit financingWorking capital line of credit financing
under this subsection may be used—
(i)to acquire
inventory for the production of milk;
(ii)to pay direct
and indirect costs (such as design, engineering, labor, and overhead costs)
used for—
(I)the manufacture
or purchase of goods, including work-in-process, for the production of milk;
or
(II)for the
provision of services for the production of milk; or
(iii)to support
standby letters of credit used as bid bonds, performance bonds, or payment
guarantees.
(B)Accounts
receivable financingAccounts receivable financing under this
subsection may be used to finance export accounts receivables for milk and milk
products sold on payment terms of not more than 180 days after the date of
arrival at the port of importation, if the finance export accounts receivable
have been insured by the Commodity Credit Corporation or other guarantor
approved by the
Secretary.
.
9.Federal loan
forgiveness programThe
National Agricultural Research, Extension, and Teaching Policy Act of 1977 (7
U.S.C. 3101 et seq.) is amended by adding at the end the following:
PFederal dairy
education loan forgiveness
1495.This subtitle may be
cited as the Federal Dairy Education Loan Forgiveness
Act
.
1496.In this subtitle:
(1)The term family dairy farm means the real
property of a dairy farm—
(A)owned by—
(i)1
or more immediate family members; or
(ii)a family dairy
farm corporation; and
(B)used for the
production, for commercial purposes, of milk or milk products.
(2)Family dairy
farm corporationThe term family dairy farm
corporation means a corporation—
(A)at least 75
percent of the assets of which are devoted to active involvement in farming;
and
(B)at least 75
percent of each class of stock of which is continuously owned by 1 or more
immediate family members.
(3)The term immediate family member means
a spouse, child, stepchild, parent, stepparent, grandparent, brother,
stepbrother, sister, stepsister, or similar relative-in-law of an owner of real
property, as determined by the Secretary.
(4)Institution of
higher educationThe term institution of higher
education has the meaning given the term in section 101(a) of the
Higher Education Act of 1965 (20
U.S.C. 1001(a)).
(5)The
term program means the Federal dairy education loan forgiveness
program established under section 1497(a).
(6)The term qualified applicant means a
resident of the United States who, as determined by the Secretary—
(A)holds a 2- or
4-year degree in a field related to the production of agricultural products
from an institution of higher education;
(B)on or after
January 1, 2008, has commenced the first year of full-time ownership or
operation of a family dairy farm; and
(C)is the borrower
of an outstanding qualified loan as a result of pursuing a degree described in
subparagraph (A).
(7)The term qualified loan means—
(A)(i)a loan made, insured,
or guaranteed under section 428 or 428H of the Higher Education Act of 1965 (20
U.S.C. 1078, 1078–8);
(ii)a Federal Direct Stafford Loan or
a Federal Direct Unsubsidized Stafford Loan made under section 455 of that Act
(20 U.S.C. 1087e); or
(iii)a consolidation loan under
section 428C of that Act (20 U.S.C. 1078–3), or a Federal Direct Consolidation
Loan under section 455 of that Act (20 U.S.C. 1087e), to the extent that the
amount of the loan was used to repay a loan described in clause (i) or (ii);
and
(B)a loan under part
B or D of title IV of that Act (20 U.S.C. 1070 et seq.); or
(C)a loan under a
guaranteed student loan program of the Department.
1497.Federal dairy
education loan forgiveness program
(a)Subject to the availability of appropriations, the
Secretary shall carry out a Federal dairy education loan forgiveness program
under which the Secretary shall assume the obligation to repay an amount
calculated in accordance with subsection (c) for 1 or more qualified loans made
to eligible qualified applicants in accordance with this section.
(b)A
qualified applicant shall submit to the Secretary an application and such
documentation of continued eligibility as the Secretary determines to be
appropriate.
(c)The maximum amount that the Secretary may repay under the
program for each qualified applicant shall be equal to the average annual cost
of tuition at land–grant colleges and universities (as determined by the
Secretary annually), for each year that the qualified applicant—
(1)is an owner or
operator of a family dairy farm; and
(2)has not otherwise
received loan repayment on behalf of the qualified applicant under this section
or any other Federal or State program.
(d)Nothing in this section authorizes the
refunding of any repayment of a qualified loan.
(e)Any payment to, or on behalf of, a
qualified applicant under this subtitle shall not be included in the gross
income of the qualified applicant for purposes of the Internal Revenue Code of
1986.
(f)Authorization
of appropriations
(1)There are authorized
to be appropriated such sums as are necessary to carry out this
subtitle.
(2)If the total amount of
funds appropriated to carry out this subtitle is insufficient to provide loan
repayment under the program for all eligible qualified applicants, the
Secretary shall provide loan repayment to eligible qualified applicants on a
pro rata
basis.
.
10.Mandatory
reporting of dairy commodities
(a)Section 272 of the Agricultural Marketing
Act of 1946 (7 U.S.C. 1637a) is amended to read as follows:
272.In this subtitle:
(1)
(A)The term dairy commodity means a product
manufactured from milk or a milk-derived ingredient.
(B)The
term dairy commodity includes—
(i)fluid
milk;
(ii)cheese;
(iii)butter;
(iv)nonfat dry
milk;
(v)skim milk;
(vi)whey
products;
(vii)dry proteins
(such as a milk protein concentrate, casein, and a caseinate);
(viii)a lactose
product; and
(ix)a fresh dairy
product (such as yogurt and ice cream).
(2)The term dairy processor means a person or
legal entity that commercially processes milk into cheese, butter, nonfat dry
milk, or other dairy solids.
(3)The
term Secretary means the Secretary of
Agriculture.
.
(b)Section 273 of the Agricultural Marketing Act of 1946
(7 U.S.C. 1637b) is amended—
(1)by redesignating
subsections (c) and (d) as subsections (d) and (e), respectively; and
(2)by striking
subsections (a) and (b) and inserting the following:
(a)
(1)The corporate officers or officially–designated
representatives of each dairy processor shall report to the Secretary at least
once each reporting day, not later than 10:00 a.m. Central Time, for each sales
transaction involving a dairy commodity, information concerning—
(A)the sales
price;
(B)the quantity
sold;
(C)the location of
the sales transaction; and
(D)product
characteristics, including—
(i)moisture
level;
(ii)packaging
size;
(iii)grade;
(iv)if appropriate,
fat or protein level;
(v)heat level for
dried products; and
(vi)other defining
product characteristics.
(2)The
Secretary shall make the information reported under paragraph (1) available to
the public not less frequently than once each reporting day, categorized by
location and product characteristics.
(b)
(1)The corporate officers or officially–designated
representatives of each dairy processor shall report to the Secretary, on the
first reporting day of each week, not later than 9:00 a.m. Central Time, for
the prior week information concerning—
(A)the sales prices
for sales transactions involving dairy commodities, categorized by product
characteristics; and
(B)the quantities of
dairy commodities sold.
(2)The
Secretary shall make the information reported under paragraph (1) available to
the public on the first reporting day of the each week, not later than 10:00
a.m. Central Time, categorized by location and product characteristics.
(3)The Secretary shall use weekly prices published under
paragraph (2) to calculate Federal milk marketing order prices.
(c)
(1)The corporate officers or officially-designated
representatives of each dairy processor shall report to the Secretary, on the
first reporting day of each month, not later than 9:00 a.m. Central Time, the
quantity of all dairy commodities processed by the dairy processor during the
prior month.
(2)The
Secretary shall make the information reported under paragraph (1) available to
the public on the first reporting day of the each month, not later than 10:00
a.m. Central Time, categorized by location and product
characteristics.
.