Under strong pressure from dairy processors, USDA has reversed itself and decided to speed up the agency's review of proposals to amend the Class III and Class IV milk price formula manufacturing allowances for all Federal Milk Marketing Orders. The International Dairy Foods Association led the objections when the agency this summer decided to postpone a decision until it could hold more hearings later in the year. After the protest, the agency decided to hold the hearing in mid September.
"We're thrilled that USDA heard the outcry from Congress to do the right thing and quickly reconvene the hearing," said Chip Kunde, IDFA senior vice president.
The make allowances established in 2000 fix the margins USDA permits processors to apply to cover the manufacturing costs of turning raw milk into a finished dairy product. These margins currently are based on industry manufacturing cost data from 1997-99. Processors maintain they are grossly below today's true costs.
Treasury Secretary Henry Paulson is strongly urging a revival of the Doha round of WTO talks. The negotiations abruptly ended in August after insurmountable disagreements over rich and developing countries, primarily involving agricultural issues. U.S. negotiators had pressed for greater access to developing markets for both raw and manufactured U.S. food products.
If the talks are revived, Agriculture Secretary Mike Johanns says a successful agreement would result in sweeping changes to many longstanding U.S. agricultural support programs. In a speech to the Cato Institute's Center For Trade Policy Studies, Johanns said under the administration's own trade proposal, the U.S. would be forced to reduce its "trade distorting" support of agriculture by 53 percent.
Milk producers are voting on final amendments to the pooling provisions of USDA's Mideast, Central and Upper Midwest Milk Marketing orders. The USDA amendments would permanently limit the amount of milk handlers can pool in each region between 115% and 135% of the previous month's volume. The market administrator would also be able to increase the maximum administrative assessment up to 0.8¢ per hundredweight on all pooled milk.