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Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2004

By:
Date:
Location: Washington, DC

AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2004

AMENDMENT NO. 2080

Mr. SPECTER. Madam President, I ask unanimous consent that we now consider my amendment No. 2080, which is pending.

The PRESIDING OFFICER (Ms. MURKOWSKI). Without objection, it is so ordered.

Mr. SPECTER. Madam President, this amendment provides that none of the funds made available by this act may be used to pay the salaries or expenses of employees of the Department of Agriculture to allocate the rate of price support in a manner that does not support the price of milk in accordance with section 1501(b) of the Farm Security and Rural Investment Act of 2002.

That bill provides, in unequivocal terms, that the price of milk shall be supported at the rate equal to $9.90 per hundredweight for milk containing 3.67 percent butterfat.

On July 8, 20 Senators wrote to the Secretary of Agriculture calling on the Secretary to observe the law with respect to that pricing. I ask unanimous consent that the text of this letter be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

U.S. SENATE,
Washington, DC, July 8, 2003.

Hon. ANN VENEMAN,
Secretary of Agriculture, Department of Agriculture, Washington, DC.

DEAR SECRETARY VENEMAN: We are writing in support of the National Milk Producer Federation's request for immediate action concerning the Commodity Credit Corporation, CCC, purchase prices for dairy products. Since the current prices reflect only those costs incurred for commercial sales, the market price for individual products has fallen below support levels, thus allowing the price of milk used to produce them to fall below the statutory support level for milk of $9.90 per hundredweight. Accordingly, it is imperative that action be taken to adjust the support program purchase price levels for cheese, butter and nonfat dry milk to reflect the significant additional costs manufacturers face when selling products to CCC.

Class III milk prices have fallen below the milk price support level, and cheese prices have fallen below their respective CCC purchase price levels, because the CCC dairy commodity purchase prices do not compensate for the significant additional costs manufacturers face when they sell products to the CCC. As a result, manufacturers often sell dairy commodities to commercial customers at prices well below the CCC support purchase prices. During the months for which the Class III prices have fallen below support, market prices for cheddar block and barrel cheese have been several cents below their respective support purchase prices.

Without question, our dairy farmers are suffering and need our help. Congress has done its part through enactment of the Farm Bill. It is now time for your Department to follow through and ensure that the price support program operates as we intended.
The adjustments outlined above can move us a long way toward accomplishing this vital goal.

Thank you for your time and attention to this matter. We look forward to a timely response.

Sincerely,

Arlen Spector; Jack Reed; Barbara A. Mikulski; Max Baucus; Russel D. Feingold; Paul Sarbanes; Frank Lautenberg; Jim Jeffords; Patty Murray; Ted Kennedy; Patrick Leahy;

Charles Schumer; Mark Dayton; Tim Johnson; Susan Collins; Olympia Snowe; Joe Biden; John F. Kerry; Hillary Rodman Clinton; Herb Kohl; Norman Coleman.

Mr. SPECTER. Madam President, I was lead signatory of the letter. No Senator had received a reply, until today, when we were given a copy of a letter dated August 13, 2003-that is a date stamp, not the date of the letter, which purports to respond to that letter.

In effect, the letter from J.B. Penn, Under Secretary, Farm and Foreign Agriculture Services, concedes that the law was not being followed. The relevant portion reads, in part:

[W]e appreciate your concern that many dairy sector representatives believe that cheese manufacturers are reluctant to sell to CCC, which, in turn, causes monthly Class III milk prices (milk use for cheese) to fall below the $9.90 per hundredweight price support level.

Omitting some language not directly relevant, the concluding sentence of the paragraph is:

The perception is that these additional requirements and the requisite costs lead to the reluctance.

I ask unanimous consent that that letter be printed in the RECORD.

There being no objection, the material was ordered to be printed in the RECORD, as follows:

UNITED STATES
DEPARTMENT OF AGRICULTURE,
Washington, DC, August 13, 2003.

Hon. ARLEN SPECTER,
U.S. Senate, Hart Senate Office Building, Washington, DC.

DEAR SENATOR SPECTER: On behalf of Secretary Veneman, thank you for your letter of July 8, 2003, jointly signed by your colleagues, regarding the Commodity Credit Corporation (CCC) dairy product purchase prices.

We appreciate your concern that many dairy sector representatives believe that cheese manufacturers are reluctant to sell to CCC, which, in turn, causes monthly Class III milk prices (milk used for cheese) to fall below the $9.90 per hundredweight price support level. As you know, CCC has requirements in addition to those of commercial sales, primarily for packaging materials, additional storage, additional financing, and Department of Agriculture (USDA) grading. The perception is that these additional requirements and requisite costs lead to the reluctance.

Cheese prices have increased in recent weeks to $1.59 per pound. This is 46 cents per pound above the CCC purchase price and will result in a July Class III milk price above $9.90. Cheese prices have increased because May and June milk production was below a year ago, and there is concern in the market that cheese stocks are inadequate.

We concur that there are extra costs to sell cheese to CCC when compared to the commercial market. However, the fact is, even under current conditions and prices, CCC purchased an average of 1.4 million pounds of cheese per week in January through June. To address industry's concerns, USDA officials have met with representatives of the National Milk Producers Federation and the International Dairy Food Association to discuss the issue. USDA continues to evaluate the situation to determine if any action is required under USDA's milk price support program. Your comments will be taken into consideration as we consider these choices.

Again, thank you for your letter. A similar letter is being sent to your colleagues.

Sincerely,

J.B. PENN,
Under Secretary, Farm and Foreign Agricultural Services.

Mr. SPECTER. Madam President, the consequence has been that the class III price of milk used to make cheese has been below the $9.90 support price 17 times since January 2000 and has been as low as $8.57 in November 2000 and $9.11 in February 2003.

The Secretary might make an argument that the average price isn't at $9.90, but factually that argument could not be made. What we are doing essentially is asking the Secretary of Agriculture to observe the law. It doesn't seem to me that that is too much to ask. We are not trying to rewrite the substantive law on milk pricing because it was enacted in 2002. But we are utilizing this appropriations bill to require that the Secretary observe the law, with the interdiction that she cannot spend any money under this bill unless she does observe the law with respect to this milk price.

We have had a considerable discussion back and forth as to whether the amendment would be accepted. I am prepared to vote on it, but I don't want to burden the record with a vote. I say to the distinguished chairman of the subcommittee of the distinguished Appropriations Committee, where I have served with the Senator from Utah for the past 13 years, in the absence of a recorded vote, which I think would be overwhelming, I am prepared to accept a voice vote. But I would like assurances that the manager will fight to keep this in conference.

Mr. BENNETT. Madam President, I will respond to the Senator by telling him I am in favor of his amendment and will carry that attitude into conference and do the best I can to see to it that it survives.

Mr. SPECTER. This may be risky, but I direct the same question to the distinguished ranking member, the Senator from Wisconsin, my longstanding friend, Mr. Kohl.

Mr. KOHL. I feel as does Senator Bennett. I will do my best to see that it stays in conference.

Mr. SPECTER. That is very assuring. I am delighted to proceed, as I have discussed with the managers, to have a voice vote and have the amendment in effect accepted, if that is still agreeable to the distinguished Senator from Utah.

Mr. BENNETT. I thank the Senator from Pennsylvania. I believe that, in the interest of time, a voice vote would be sufficient. I think we should have a voice vote rather than just accept the amendment by unanimous consent, so that the record does show that a formal vote took place.

Mr. SPECTER. I ask for the voice vote on the amendment.

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