May 20, 2010

A new bill has officially been introduced to the US designed to stabilise dairy prices and control the growth of dairy farms rooting for expansion.

The legislation, known as the Dairy Price Stabilization Act, is a joint plan of Holstein Association USA, Milk Producers Council of California, and many others concerned about the future of dairy.

The past year saw dairy farmers across the nation experience one of the worst price crises of the past 40 years, with prices in June dropping to less than US$7 per hundred pounds of milk, two-three times below their normal June values.

Dairy price stabilisation seeks to do just that - stabilise a volatile market by setting prices paid to farmers according to the growth and decrease in market demand, and charging a market access fee if they choose to expand beyond current production.

The legislation was introduced May 12 by Congressmen Jim Costa, Peter Welch, Joe Courtney, Rick Larsen and John B. Larson.

"While periods of boom and bust are not new to the dairy industry, our dairy families cannot afford another year of low milk checks that don't even cover the cost of production," Costa said in a released statement. "The dairy price crisis is devastating our local economy and ability to create and sustain jobs. This bill will help the dairy industry get back on track and curb the milk price volatility that is driving dairy farmers in the Valley and our nation out of business," he added.

A dairy price stabilisation plan has been in the works for the past two years, as its leaders traveled the country promoting the concept. California dairyman Doug Maddox made multiple trips to Ohio to speak on the issue. He is past president of Holstein Association USA.