[Congressional Record (Bound Edition), Volume 145 (1999), Part 6]
[Senate]
[Page 7653]
[From the U.S. Government Publishing Office, www.gpo.gov]




                     THE NORTHEASTERN DAIRY COMPACT

  Mr. SESSIONS. Mr. President, I wish to express my support for a bill 
that was introduced yesterday by Senator Jeffords--the Northeastern and 
Southern Dairy Compact. This bill would reauthorize the Northeastern 
Dairy Compact and grant the consent of Congress for a Southern Dairy 
Compact. The Southern Dairy Compact, which has been passed by Alabama 
and 10 other southeastern States, authorizes an interstate Compact 
Commission to take whatever measures are necessary to assure customers 
of an adequate local supply of fresh fluid milk while encouraging the 
continued viability of dairy farming within the region encompassing the 
compact States.
  The current milk marketing order pricing system does not adequately 
account for regional differences in the costs of producing milk; 
furthermore, the Federal milk marketing order system establishes only 
minimum prices for milk. Due to these inconsistencies in milk prices, 
surplus milk is flooding the southeast and shutting down the family 
dairy farmer. By design, the Federal program relies on State regulation 
to account for regional differences. However, milk usually crosses 
State lines, so courts have ruled that individual States do not have 
the authority to regulate milk prices under the interstate commerce 
clause of the U.S. Constitution. To account for these regional price 
differences, states can gain regulatory authority by entering into a 
compact. States are now joining these compacts to maintain their dairy 
industry and are asking us to approve of the legislation they have 
already passed in their respective states. The support at the State 
level has been overwhelming and unanimous and I am hopeful this body 
will adopt these compacts unanimously as well.
  The compact benefits everyone. Farmers are assured of more stable 
milk prices, thereby affording them the opportunity for better planning 
and recovery of production costs. Consumers will benefit as prices for 
fluid milk stabilize in the supermarket. According to the USDA and GAO 
accounting figures, there was a 40 percent increase in the market price 
of fluid milk between 1985 and 1997. According to the Office of 
Management and Budget, the compact established in the Northeast in 1996 
increased the income of dairy farmers by 6 percent while maintaining 
prices to the consumer at 5 cents/gallon below the national average 
price for milk. In addition, OMB found no adverse effect on states 
outside of the compact. The compact is a win-win piece of legislation.
  Dairy farming is an important industry in my State of Alabama, and I 
am a strong supporter of the family farmer. Their hard work and 
dedication is at the heart of the greatness of this nation. In Alabama, 
there are more than 2,000 employees in the dairy industry supporting a 
$48 million payroll. Last year, the dairy industry in Alabama generated 
a total of $204 million in economic activity. However, recent 
production capacity has deteriorated and further decreases may push 
production past the point of no return. From 1995 to 1998, milk 
production in Alabama decreased by 26 million pounds. The establishment 
of the dairy compact will ensure fair prices to farmers so that they 
can maintain a profitable level of milk production. The creation of a 
compact will bring stability to an important industry in Alabama and 
all over the Southeast. Consumers will be assured of fair prices and 
farmers will be confident in their production decisions.
  The States have voiced their concerns. The States have developed a 
solution. It is now our responsibility to stamp our approval onto the 
compacts which have been passed in States throughout the Northeast and 
Southeast.

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