Congress extends dairy support

SALEM, Ohio – Dairy farmers may have their safety net back, thanks to Congress’ extension of a milk price support program.
The legislation now awaits the president’s signature.
Expiration. The Milk Income Loss Contract program, which paid Ohio and Pennsylvania dairymen more than $300 million when prices were low, expired last September.
On Feb. 1, the House approved the budget reconciliation legislation, which includes funding for the program. The Senate passed the bill in December.
The current measure would extend those payments through Sept. 30, 2007.
Dropping rate. Previously, the program paid farmers 45 percent of the difference when Boston Class 1 prices fell below the $16.94 per hundredweight support level.
The new legislation, however, would drop that rate to 34 percent.
Payments are limited to a farm’s first 2.4 million pounds of milk produced.
Support levels. The program, commonly called MILC, was particularly important in 2002 and the first half of 2003 when prices were consistently below the support level.
Pennsylvania Farm Bureau President Carl Shaffer credits the program for keeping farmers out of deeper debt and selling their operations during that time.
More recently, though, prices have been stronger, and farmers haven’t been eligible for payments since June when the rate was just over 3 cents per hundredweight.
(Reporter Kristy Hebert welcomes feedback by phone at 800-837-3419, ext. 23 or by e-mail at khebert@farmanddairy.com.)