Washington, DC – U.S. Senator Dianne Feinstein (D-Calif.) today led a bipartisan coalition of seven other Senators and 16 Representatives from states with the largest dairies in urging Agriculture Secretary Tom Vilsack to fairly distribute $350 million in federal dairy relief and avoid regional bias. As a result of low dairy prices, Western dairy farmers are losing up to $100,000 in revenues per month.

The conference report for the Fiscal Year 2010 Agriculture appropriations bill includes $350 million in relief for struggling dairy farmers. This provision sets aside $290 million that will likely go towards a market loss program that distributes cash payments directly to dairy farmers in times of hardship. Previously, the program of direct payments used by Department of Agriculture disproportionally benefited farmers in other regions in the country. However, the report’s provision allows for the payments to be distributed on a more equitable basis.

The remaining $60 million in aid has been set aside to purchase surplus dairy products, and the group of Senators and Representatives have asked Secretary Vilsack to ensure that these funds be used specifically to purchase cheese. Experts have indicated that reducing the record cheese surplus is one of the simplest steps to increase the price of milk, and bring relief to dairy farmers.

Following is the text of the letter sent by Senator Feinstein and the coalition of members to Secretary Vilsack:

October 8, 2009

The Honorable Thomas J. Vilsack
Secretary
U.S. Department of Agriculture
Washington, D.C. 20250

Dear Secretary Vilsack,

As you know, last week the Conference Committee favorably reported the Fiscal Year 2010 Agriculture Appropriations Conference Report, which included $350 million in emergency relief funds for dairy farmers across the country.  We write to seek your assurance that the direct payments authorized by this bill will be equitably distributed based on the volume of milk produced, and that the purchase of dairy products will have a direct impact on the overall price of milk. 

As Members of Congress representing states with large dairy interests, we believe that the $290 million provided to the Department under section 10104 of the 2002 Farm Bill (P.L. 107-171), must be structured appropriately if it is to help our struggling dairy farmers.  This section provides the authority to make direct payments to all dairy farmers regardless of the volume of milk they produce.  Accordingly, we urge you to follow the Congressional intent of this section and not impose an arbitrary payment or production cap.  Such a cap would create a regional bias that was not intended when Congress approved this authority in 2002. 

Additionally, the Conference Report provides $60 million to purchase cheese and other dairy products.  We ask that you use these funds to purchase dairy products that will likely have a direct impact on the price of Class III milk.  It is our understanding that historically high inventories of cheese remain a significant barrier to the swift recovery of the price of milk, and we ask that you consider using the entire $60 million to purchase this product.  According to your department’s August 2009 Cold Storage Report, cheese inventories are nearly eleven percent higher than last year, and economists including Dr. Robert Cropp, professor emeritus at the University of Wisconsin-Madison, have recommended reducing this inventory to speed the recovery of milk prices.

Like producers in the rest of the country, the dairy crisis has had tragic consequences for our constituents.  We strongly support this emergency funding, and we ask that you distribute these funds in the most equitable and effective way possible.  Thank you for your attention to this important matter and we look forward to your quick response.

Sincerely,

U.S. Senator Dianne Feinstein (D-Calif.)
U.S. Senator Mike Crapo (R-Idaho)
U.S. Senator Bill Nelson (D-Fla.)
U.S. Senator Tom Udall (D-N.M)
U.S. Senator Patty Murray (D-Wash.)
U.S. Senator Maria Cantwell (D-Wash.)
U.S. Senator Bob Bennett (R-Utah)
U.S. Senator James Risch (R-Idaho)

U.S. Representative Sam Farr (D-Calif.)          
U.S. Representative Dennis Cardoza (D-Calif.)
U.S. Representative Jane Harman (D-Calif.)
U.S. Representative Linda Sanchez (D-Calif.)
U.S. Representative Lynn Woolsey (D-Calif.)
U.S. Representative Zoe Lofgren (D-Calif.)
U.S. Representative Jim Costa (D-Calif.)
U.S. Representative Judy Chu (D-Calif.)
U.S. Representative Ben Ray Lujan (D-N.M)                                                 
U.S. Representative Harry Teague (D-N.M.)
U.S. Representative Allen Boyd (D-Fla.)         
U.S. Representative Joe Baca (D-Calif.)
U.S. Representative Jerry McNerney (D-Calif.)                                                        
U.S. Representative Bob Filner (D-Calif.)
U.S. Representative Mike Simpson (R-Idaho)                                                           
U.S. Representative Walt Minnick (D-Idaho)

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