DFA Applauds NMPF’s Action Against USDA

NMPF and DFA uphold mission to protect dairy farmers
December 11, 2008

Kansas City, Mo. - The Board and management of Dairy Farmers of America, Inc. (DFA) strongly support the recent actions of National Milk Producers Federation (NMPF) to prevent the U.S. Department of Agriculture from allowing the sale of nonfat dry milk at prices below levels specified in the 2008 Farm Bill.

NMPF, of which DFA is a member, recently sought a temporary restraining order to block USDA from allowing The Seam, a private marketing entity, to auction nonfat dry milk at prices below the congressionally mandated minimum level.

Yesterday, a U.S. district judge in Chicago agreed with NMPF and requested that USDA postpone the auction.

“Our job as a producer-owned cooperative is to protect farmers’ interests,” said Rick Smith, president and CEO of DFA. “Had USDA been allowed to privately auction off nonfat dry milk at prices below what the Farm Bill calls for, our producers’ incomes would have suffered. With on-farm costs high, our members’ profit margins are already squeezed. We must do everything in our power to protect their livelihoods.”

The Dairy Product Price Support Program in the 2008 Farm Bill states that USDA cannot sell nonfat dry milk at less than 110 percent of the price at which it purchased the product. Under this rule, USDA is forbidden to sell nonfat dry milk back to the market at less than 88 cents per pound in order to keep prices from being driven down further. The auction scheduled with The Seam would have resulted in a reduction to dairy producers’ incomes.

USDA and The Seam have entered into a court-ordered agreement to not hold any milk powder auctions until NMPF’s full complaint and motion can be heard on January 22.

“We applaud the court’s decision to side with the nation’s dairy farmers and hope that they will continue to support dairy farmers and NMPF,” said Smith.