Auction of Surplus Dry Milk Delayed

Milk producers believe sale would depress prices.

U.S. District Judge John Darran, in Chicago, has asked USDA to postpone the auction of surplus non-fat dry milk in its Stocks for Food Initiative. A hearing is set for January 22nd to hear the case brought by the National Milk Producers Federation. The USDA plan was to barter surplus non-fat dry milk for ready-to-eat products. The NMPF believes the plan would depress milk prices to farmers an violate federal law which bars the government from selling milk powder for less than 10% above its original cost.

This year, the Commodity Credit Corporation has already purchased more than 75 million pounds of powder for 80 cents a pound. Some trade analysts speculate that without a disposal mechanism, stocks could build to more than 100 million pounds.

Undersecretary Mark Keenum says when USDA came up with the concept of bartering for food aid, they were looking for ways to augment tight budgets. Since 2007, more than 138 million dollars in commodities has been bartered generating 12 million dollars worth of food for aid programs.

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