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Letter to The Honorable Tom Vilsack, Secretary, U.S. Department of Agriculture

Letter to The Honorable Tom Vilsack, Secretary, U.S. Department of Agriculture

SHAHEEN: USDA TAKES STEPS TO HELP DAIRY FARMERS

"Secretary Vilsack Takes Action Following Letter, Meeting with Shaheen"

U.S. Senator Jeanne Shaheen announced today that the Department of Agriculture (USDA) will increase the amount paid for dairy products through the Dairy Product Price Support Program (DPPSP) beginning in August. Shaheen recently sent a letter urging Secretary Vilsack to make these changes to the DPPSP, and she met with him to discuss options to help dairy farmers earlier this week. Today, Shaheen also introduced an amendment to the Fiscal Year 2010 Agriculture Appropriations bill to increase MILC payments to multigenerational farms.

"Increasing the amount paid to dairy farmers is the first step in helping small and medium sized dairy farms stay in business," said Shaheen. "This is great news, but there is more work to be done. We must continue to find ways to reduce volatility in the market, and help dairy farmers profit so that they can keep their farms."

The USDA will raise the price paid for nonfat dry milk from $0.80 per pound to $0.92 per pound, the price paid for cheddar blocks from $1.13 per pound to $1.31 per pound, and the price of cheddar barrels from $1.10 per pound to $1.28 per pound. The agency estimates that these increases, which will be in place from August 2009 through October 2009, will increase dairy farmers' revenue by $243 million.

"We are happy to hear the Secretary is responding to existing market conditions," said Jeff Holmes, New Hampshire Farm Bureau President. "This increase should equate to a market price for milk that is closer to our actual production costs, and we hope this increase translates into increased milk checks in the near future."

Since joining the Senate, Shaheen has met with Vilsack in New Hampshire, recommended former New Hampshire Commissioner of Agriculture and Plainfield resident Stephen Taylor to be appointed to the USDA's commission to review the federal milk marketing order system, sent Vilsack a letter on July 16 with 11 Senate colleagues urging for increases to the DPPSP, and met with Vilsack to reiterate the need for swift action.

The full text of the July 16th letter and USDA press release announcing today's policy change follow:

The Honorable Thomas Vilsack
Secretary of Agriculture
U.S. Department of Agriculture
1400 Independence Ave., SW
Washington, DC 20250

Dear Secretary Vilsack:

We are writing to request your immediate attention to the current crisis in the dairy sector.

As you know, America's dairy producers are facing the worst prices in nearly 30 years. Dairy farmers from every region of the country are losing money each month which is jeopardizing the long term stability of the industry and the livelihood of thousands of our rural communities. We appreciate your actions to implement the Dairy Export Incentives Program and your recent comments supporting additional lending opportunities for dairy producers. Despite those welcome actions, we believe more aggressive action is needed to halt the current crisis.

As you know, Congress in Section 1501 of the enacted 2008 Farm Bill (P.L. 110-246) updated the Dairy Price Support program to set price floors under individual dairy products (butter, cheese and non-fat dry milk). While specific prices at which USDA is mandated to purchase product were included in the legislation, Congress clearly gave the Department the authority to increase the purchase prices if necessary. We are therefore urging you to temporarily increase the Dairy Price Support program products purchases by a significant level to restore a meaningful safety net for America's dairy farmers.

We believe bold and swift action to increase the purchase prices under the Dairy Price Support program is needed to avert further crisis. During January through April this year, the U.S. all-milk price averaged $4.80 per cwt. below the U.S. average cash cost of production. And in the months since, dairy farmers have continued to lose significant equity. A meaningful but temporary increase in the Dairy Price Support program will begin to restore farm level prices and help restore producers' ability to produce basic cash flow for their operations during these difficult financial times.

Thank you for your immediate attention to this issue. We look forward to working with you to support America's dairy producers.

Sincerely,

Senator Jeanne Shaheen
Senator Patrick Leahy
Senator Herb Kohl
Senator Russ Feingold
Senator Bernie Sanders
Senator Chuck Schumer
Senator Patty Murray
Senator Tim Johnson
Senator Carl Levin
Senator Robert Casey
Senator Arlen Specter
Senator Kirsten Gillibrand


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