USDA Moves to Help Dairy Sector and Nutrition Programs

Transfer of dry milk will be a win-win situation.

Secretary of Agriculture Tom Vilsack announced Thursday that 200 million pounds of nonfat dry milk will be moved from the Commodity Credit Corporation to USDA's Food and Nutrition Programs. The nonfat dry milk has been purchased by the government since last October under price support mechanisms included in the 2008 Farm Bill.

Dairy Prices have plummeted since last year and coupled with the high cost of feed dairy producers are struggling. Forecasts for the average price of all milk per hundredweight in 2009 are around $11.55 down significantly from the $18.32 seen in 2008 and the lowest all milk price since 1978.

"All of this is designed to allow us to bring down the surplus supply," Vilsack told reporters. "Donating these dairy products to domestic and international feeding programs will increase the consumption of dairy products and help low-income struggling families put nutritious food on their table."

USDA will continue to help dairy farmers by reducing the surplus of nonfat dry milk overhanging the market with estimated purchases in 2009 of 15 million pounds of butter and 415 million pounds of nonfat dry milk. Vilsack also announced that issuance of the Milk Income Loss Contract payments should begin next week.

"These counter cyclical payments will provide significant relief to struggling dairy farmers," Vilsack said. "We have been working on this plan for a number of weeks in an effort to try and be responsive to the concerns that have been expressed by milk producers, members of Congress that represent the interest of milk producers and by the National Milk Producers Federation."

NMPF President and CEO Jerry Kozak participated in the press conference and was pleased with USDA's action.

"This is an important first step taken by Secretary Vilsack to use the resources of the USDA to help address the economic crisis facing dairy farmers, who right now are suffering from punishing low milk prices. Using government surpluses in a way that doesn’t displace commercial dairy sales benefits everyone served by these programs," Kozak said. "We recognize that it takes time for the government to implement a multi-pronged approach to deal with the price depression confronting dairy farmers, and we look forward to continue working with the Obama Administration, and those in the USDA and other agencies, in identifying more tools that the government can use."

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