[Congressional Record Volume 148, Number 130 (Monday, October 7, 2002)]
[Senate]
[Page S10051]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER:
  S. 3068. A bill to amend the Agricultural Adjustment Act to require 
the Secretary of Agriculture to use the price of feed grains and other 
cash expenses as factors to determine the basic formula price for milk 
under milk marketing orders; to the Committee on Agriculture, 
Nutrition, and Forestry.
  Mr. SPECTER. Mr. President, I had sought recognition initially to 
discuss two other subjects. While the issue of Iraq is very much on the 
minds of the American people and the focus of attention worldwide, 
there are other important considerations which are pending and are of 
interest to Pennsylvanians and what is happening with the economy.
  We really cannot let our attention focus solely on Iraq.
  There are many matters which involve important economic issues and 
great numbers of jobs. That is a subject that is very much on my mind 
with respect to the Pennsylvania dairy farmers. I propose to introduce 
legislation this afternoon on that subject.
  Agriculture is the largest industry in Pennsylvania, and dairy is its 
single largest component. Pennsylvania is the fourth largest dairy 
producer in the Nation. We have approximately 10,300 dairy farms which 
produce $1.710 billion worth of milk each year.
  Regrettably, over the past decades, Pennsylvania has lost an average 
of 300 to 500 dairy farmers per year. In the years 1993 to 1998, 
Pennsylvania lost more than 11 percent of its dairy farmers. That is 
because Pennsylvania farmers have had to deal with drought and other 
natural disasters, high feed and transportation costs, and other 
variables that challenge their ability to sustain their farms, but 
mostly because the cost of production exceeds what has been the average 
price for class 3 dairy products. It varies tremendously. It was $15.90 
in September of last year. It went down to $9.92 in September of this 
year. The cost has been tremendous.
  Meanwhile, the average cost of production of milk in Pennsylvania per 
hundredweight is calculated by the Pennsylvania Department of 
Agriculture. The average was $14.32 in the year 2001. The price for 
milk in January of 2002 was $11.87 per hundredweight, going down to 
$10.82 per hundredweight in May, and $9.54 per hundredweight in August 
of this year. The cost of production exceeds what the Pennsylvania 
dairy farmers are able to obtain for their milk.
  I serve on the Agriculture Subcommittee of Appropriations. On May 14 
of last year at an extensive hearing in Philadelphia, we heard from 
economists, we heard from farmers, and an analysis for merchants and an 
analysis of what was happening on dairy farming.
  It is a complex matter. While the price of milk goes down for dairy 
farmers, the cost of milk goes up to the consumer. I know at the shop 
where I buy a half-gallon of milk, it was $1.89, and it jumped to $2.19 
for a half-gallon of milk at the precise time when the payments made to 
the dairy farmers were going down. It seems to me there really has to 
be an additional factor in the calculation of these prices by the U.S. 
Department of Agriculture.
  It is for that reason that I am proposing legislation today which 
would amend section 8(c)(5) of the Agriculture Adjustment Act with 
amendments by the Agriculture Marketing Agreement Act of 1937 to add 
the following:
  Subsection M, using as factors to determine the basic formula price 
for milk under an order issued pursuant to this section (i) the price 
of feed grains, including the cost of concentrates, by-products, 
liquid, whey, hay, silage, pasture, and other forage; and (ii) other 
cash expenses, including the cost of hauling, artificial insemination, 
veterinary services and medicine, bedding and litter, marketing, custom 
services and supplies, fuel, lubrication, electricity, machinery and 
building repairs, labor, association fees, and assessments.
  During the course of the July and August break, I traveled 
extensively on open house town meetings throughout Pennsylvania. I 
heard recurrent complaints from the dairy farmers about being unable to 
maintain the dairy farms. It is a very important matter that the small 
dairy farmers be able to continue to produce milk, which is a very 
important item in our daily diets. I don't think I need to expand upon 
that point.
  But the dairy farmers are facing enormous problems. We had hoped 
there would be a dairy compact. There had been one for the New England 
States. Legislation has been introduced--S. 1157--which is now pending 
before the Judiciary Committee. And the dairy compact would be of 
material assistance to farmers generally but certainly farmers in 
Pennsylvania.
  We had many Senators supporting the dairy compact concept but have 
had contentious battles on the Senate floor. And while the proposed 
legislation on the dairy compact was pending, I do propose the 
legislation to which I refer, and I send that amendment to the desk.

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