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Public Statements

Letter To The Honorable Tom Vilsack, Secretary, U.S. Department Of Agriculture And The Honorable Christine Varney, Assistant Attorney General, Antitrust Division, Department Of Justice

Letter

By:
Date:
Location: Washington, D.C.

Kohl Urges Closer Look At Competition In The Dairy Industry

Today, U.S. Senator Herb Kohl sent the following letter to Secretary of Agriculture Tom Vilsack, at the United States Department of Agriculture and Assistant Attorney General Christine Varney at the Department of Justice Antitrust Division. He calls on them to scrutinize antitrust enforcement in the dairy industry, focusing on the consolidation of milk processors and anticompetitive practices in agriculture and urges them to hold a workshop on diary in Wisconsin, as part of upcoming series of DOJ/USDA workshops about agriculture competition.

Kohl is Chairman of the Senate Agriculture Appropriations panel and Chairman of the Senate Subcommittee on Antitrust, Competition Policy and Consumer Rights. He worked to abolish the anticompetitive Northeast Dairy compact and was an original architect of the Milk Income Loss Contract (MILC) program. Kohl has continued to work for the agriculture industry and local farmers by including farm credit provisions in the American Recovery and Reinvestment Act that Congress passed earlier this year. He has pushed the Administration to fully implement programs like the Dairy Export Incentive Program to help offset low prices. Kohl also fought to include the feed cost adjuster for the MILC program in the 2008 Farm Bill. Kohl has worked to include an amendment to the FY2010 Agriculture Appropriations bill which includes $350 million for agriculture that is currently before the congressional conference committee. Please find the text of the letter below.

September 15, 2009
The Honorable Tom Vilsack
Secretary
U. S. Department of Agriculture
1400 Independence Avenue, S.W.
Washington, D.C. 20250

The Honorable Christine Varney
Assistant Attorney General
Antitrust Division
Department of Justice
950 Pennsylvania Avenue, N.W.Washington, D.C. 20530

Dear Secretary Vilsack and Ms. Varney:

Your recent announcement of public workshops to explore competition issues in the agriculture industry is encouraging to me. As chairman of two committees with direct jurisdiction over competition and agriculture, I urge you to specifically focus on the dairy sector and strongly encourage that a dairy workshop be held in Wisconsin as part of this process.

Hard-working family farmers are the backbone of the dairy industry and face significant competitive constraints. They currently struggle with milk prices that have fallen to historic lows while the costs of production -- including feed, fertilizer and fuel -- have risen drastically. This makes it increasingly difficult for continued operation, and many are forced to close their doors. Processor consolidation -- especially where fluid milk is concerned - has in some regions left farmers with few marketing options.

Processor consolidation is also an area of legitimate concern for consumers. Despite historically low farmgate prices for fluid milk, consumers have seen little of the benefit of lower prices. We need to explore in assertive detail whether the exercise of monopoly pricing power is contributing to this situation.

This Administration has taken several welcome steps to address the acute economic turmoil facing dairy farmers. Congress, for its part, strengthened the MILC program in the last farm bill and is currently working on an appropriations measure that would bolster dairy support. I was proud to have taken a leading role in all those efforts and will continue pressing forward. But more needs to be done. Secretary Vilsack's advisory committee to explore long term solutions in dairy is a step in the right direction. But ensuring in that we have, in the long-term, a vibrant dairy industry requires collaboration across agencies and your workshops can play a key role in the at process.

Sincerely,

Herb Kohl


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