[Congressional Record Volume 144, Number 50 (Wednesday, April 29, 1998)]
[Senate]
[Page S3797]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                      THE DAIRY REFORM ACT OF 1998

 Mr. FEINGOLD. Mr. President, today I rise in support of S. 
1982, the Dairy Reform Act of 1998, introduced by my colleague from 
Minnesota, Senator Rod Grams. The Federal Dairy Program was developed 
in the 1930's, when the Upper Midwest was seen as the primary reserve 
for additional supplies of milk. The idea was to encourage the 
development of local supplies of fluid milk in areas of the country 
that had not produced enough to meet local needs. Six decades ago, the 
poor condition of the American transportation infrastructure and the 
lack of portable refrigeration technology prevented Upper Midwest 
producers from shipping fresh fluid milk to other parts of the country. 
Therefore, the only way to ensure consumers a fresh local supply of 
fluid milk was to provide dairy farmers in those distant regions with a 
boost in milk price large enough to encourage local production--that 
higher price referred to as the Class I differential. Mr. President, 
the system worked well--too well. Wisconsin is no longer this country's 
largest milk producer. This program has outlived its necessity and is 
now working only to shortchange the Upper Midwest, and in particular, 
Wisconsin dairy farmers.
  The Dairy Reform Act of 1998 is very simple. It establishes that the 
minimum Class I price differential will be the same, $1.80/
hundredweight, for each marketing order. As many of you know, the price 
for fluid milk increases at a rate of approximately 21 cents per 100 
miles from Eau Claire, WI. Fluid milk prices, as a result, are nearly 
$3 higher in Florida than in Wisconsin, more than $2 higher in New 
England, and more than $1 higher in Texas. This bill ensures that the 
Class I differentials will no longer vary according to an arbitrary 
geographic measure--like the distance from Eau Claire Wisconsin. No 
longer will the system penalize producers in the Upper Midwest with an 
archaic program that outlived its purpose years ago. This legislation 
identifies one of the most unfair and unjustly punitive provisions in 
the current system, and corrects it. There is no substantive, equitable 
justification to support non-uniform Class I differentials in present 
day policy.
  USDA's Federal Milk Marketing Order reform proposal is currently 
being considered. It is long past the time to set aside regional 
bickering and address the problems in both options presented under the 
proposed rule. The Dairy Reform Act of 1998 will not adversely affect 
the modest reform of Option 1B as offered by Secretary Glickman. It 
will take Option 1B a step further and lead the dairy industry into a 
more market oriented program. Also producers will still be able to 
receive payment for transportation costs and over-order premiums. This 
measure would finally bring fairness to an unfair system. With this 
bill we will send a clear message to USDA and to Congress that Upper-
Midwest dairy farmers will never stop fighting this patently unfair 
federal milk marketing order system. After over 60 years of struggling 
under this burden of inequality, Wisconsin's dairy industry deserves 
more; it deserves a fair price.

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