Coleman Presses USDA to Update Marketing Allowances Costing Dairy Millions at Ag Hearing

COLEMAN PRESSES USDA TO UPDATE MARKETING ALLOWANCES COSTING DAIRY MILLIONS AT AG HEARING
Minnesota Senator calls for an update of Marketing Allowances and highlights the importance of MILC program

Recognizing sound dairy policy is vital to providing stability for farmers and processors across rural Minnesota, Senator Norm Coleman (R-MN) questioned representatives from the dairy industry and the United States Department of Agriculture (USDA) on the Milk Income Loss Contract (MILC) and the Make Allowances program at a Senate Agriculture Committee Hearing. The MILC program, authorized by the 2002 Farm Bill, provides counter-cyclical payments for farmers when farm milk prices fall below an established target price as a means of supplementing dairy farm income when farm milk prices are low. Meanwhile, Make Allowances are a key component of the classified pricing system that ensures dairy cooperatives and dairy processing companies can cover the costs of turning raw milk into finished dairy products.

"The USDA's implementation of our dairy programs can mean the difference between growth and loss in the rural communities of Minnesota and across the United States," said Coleman. "Fluid milk sales vary greatly day by day and season by season - the dairy industry is fraught with uncertainty, and both the MILC program and updated Make Allowances are fundamental to providing the stability needed for our dairy farmers and processors to thrive in the future."

The USDA has not updated the fixed Make Allowances in six years and some figures show the dairy industry losing $26 million a month because of the delay. Coleman, along with Sen. Herb Kohl, is circulating a letter among his colleagues to be sent to USDA Secretary Mike Johanns requesting the Department promptly issue an appropriate interim decision to update make allowances that are outdated and are severely impacting America's dairy cooperatives and processors.

Panelists at today's hearing included Dr. Joseph Glauber, USDA Deputy Chief Economist, Charles Beckendorf, National Milk Producers Federation, Jim Green, CEO of Kemps, and Leon Berthiaume, St Albans Cooperative Creamery of Vermont.

http://coleman.senate.gov/index.cfm?FuseAction=PressReleases.Detail&PressRelease_id=1030&Month=7&Year=2006