This bill comes after widespread concern over competition and prices in the dairy industry. The U.S. Department of Agriculture and Department of Justice held a workshop on these issues in June. To read a US Ag&Food Law Blog Post on this issue, click here. In addition, dairy herd retirements are taking place to lower output by removing cows from production in an effort to raise prices. To read a US Ag&Food Law Blog Post on this issue, click here.
Senator Sanders stated that the "Dairy Market Stabilization Act of 2010" would "bring price stability to the dairy industry and provide farmers with a fair price for their production -- a price that will allow the industry to thrive and family farms to stay in business."
The dairy industry has suffered from extreme price fluctuations. Most recently, in 2007 the price reached a high of $21.80 per hundred pounds then dropped to $11.30 in 2009. Sanders says that farmers need $17 to $18 to merely cover the cost of production.
A similar bill has been introduced in the House by U.S. Representatives Peter Welch, D-VT, and Jim Costa, D-CA.
While there are mixed opinions on whether forecasting supply and demand to stabilize prices will be effective, marketing orders for many commodities, including milk, exist to provide stability. Marketing orders are administered through USDA's Agricultural Marketing Service (AMS). For more information on marketing orders, click here to visit the National Agricultural Law Center's Federal Marketing Orders and Agreements Reading Room.
To read the Chicago Tribune story, click here.
For the full text of the Senate bill, click here.
For the full text of the House bill, click here.
Posted: 07/13/2010
