[Congressional Record Volume 155, Number 60 (Thursday, April 23, 2009)]
[Senate]
[Pages S4693-S4694]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. SPECTER (for himself and Mr. Casey):
  S. 889. A bill to amend the Agricultural Adjustment Act to require 
the Secretary of Agriculture to determine the price of all milk used 
for manufactured purposes, which shall be classified as Class II milk, 
by using the national average cost of production, and for other 
purposes; to the Committee on Agriculture, Nutrition, and Forestry.
  Mr. SPECTER. Mr. President, I seek recognition to speak on 
legislation I am introducing with Senator Casey that will require the 
Secretary of Agriculture to determine the price of all manufactured 
milk, classified as Class II milk, using the national average cost of 
production. At a time when the dairy farmers in Pennsylvania and across 
the country are seeing record low prices for their milk, this 
legislation is necessary to bring the price of milk back to a level 
where farmers can earn a living and provide for their families.
  Over the past year, farmers in my state have seen the average price 
for a hundredweight, cwt, of milk drop from around $24 in July 2008, to 
hovering around $10 this February. This dramatic price decrease has 
been the result of a perfect storm of factors, including record high 
fuel prices last summer, which increased the cost of feed and other 
supplies, and a decrease in demand for dairy products abroad, where 
cases of melamine in milk have caused a severe drop in demand.
  Last year, Sen. Casey and I worked diligently to increase the Milk 
Income Loss Contract, MILC, Program in the 2008 Farm Bill. We were 
successful in

[[Page S4694]]

including a cost of production increase to all MILC payments. These 
direct payments from the federal government are triggered when the 
price of milk per cwt falls below $16.94. When the average price of 
milk for a given month falls below this trigger, farmers are paid 45 
percent of the difference between the actual price of milk and the 
trigger price. With the 2008 Farm bill's inclusion of the cost of 
production to these payments, farmers are seeing higher MILC payments 
than they otherwise would.
  However, this is not enough. I have heard numerous reports from my 
constituents that the price of milk has fallen so low that they are 
fearful of having to sell their farms in order to provide for their 
families. Many of the dairy farms in Pennsylvania are small, family-
owned farms, which, once sold, will be lost forever. We cannot let this 
happen. The dairy industry is critical not only to Pennsylvania's 
economy, but to the economy of the U.S. and to the security of our 
nation.
  The Federal Milk Marketing Improvement Act will not only use a 
national average cost of production to determine Class II milk, but 
will also keep the Secretary of Agriculture engaged in protecting 
farmers from falling milk prices. This legislation would require the 
Secretary to adjust the value of milk four times a year, ensuring that 
price volatilities in the fuel sector will not unfairly hurt this 
industry, as we have seen it do in the past year.
  Finally, this legislation provides an exemption for new dairy 
producers, up to 3 million pounds of milk during the first year of 
production, to encourage growth in the industry. With recent losses 
across the country of so many dairy farms, this provision is important 
to spurring new farmers and producers to enter the dairy industry.
  I look forward to working with my colleagues to advance this and 
other legislation which will help a vital industry to this country. Our 
dairy farmers are the backbone of the agricultural community, and they 
deserve our support.
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