World Dairy Diary

The speedy reaction from the executive branch put the spotlight on congressional Republicans, many of whom support the legislation and might be hard-pressed to vote to uphold a veto in an election year.

Rep. Robert W. Goodlatte (Va.), ranking Republican on the House Agriculture Committee, said that he is “favorably disposed” toward the bipartisan compromise bill, but that lawmakers must decide for themselves whether to vote to override a veto. House Minority Leader John A. Boehner (R-Ohio) indicated that he will vote against the bill, saying, “I don’t think [it] represents our best effort.”

The package, the product of weeks of closed-door bargaining, is stuffed with plums for key constituencies. Dairy farmers will get as much as $410 million more over 10 years to cover higher feed costs, and negotiators tucked in an annual authorization of $15 million to help “geographically disadvantaged farmers” in Alaska, Hawaii, American Samoa and Puerto Rico.

The bill assures growers of basic crops such as wheat, cotton, corn and soybeans $5 billion a year in automatic payments, even if farm and food prices stay at record levels.

House Agriculture Committee Chairman Collin C. Peterson (D-Minn.) acknowledged that the payments are “very hard to explain to our urban colleagues.” But negotiators, under pressure from farm groups, made a token cut of $30 million a year in the current program.

Advocates of the bill stressed that eligibility will be tightened by prohibiting anyone earning more than $500,000 from off-farm sources to participate in the farm programs. Those earning more than $750,000 from farming would also be ineligible for the automatic payments. Currently, only those with more than $2.5 million in income from all sources are ineligible.

The impact of the new eligibility limits would be modest, according to data provided by the Internal Revenue Service. In 2005, it showed 2,025 taxpayers collecting subsidies had farm income above $750,000. The tighter limits will save an estimated $620 million over 10 years, budget officials said.

Producers and veterinarians know there is no time to wait when a calf has BRD, especially valuable dairy replacement heifers. With the value of these heifers at an all-time high, Baytril 100 provides a new, fast-acting, broad-spectrum BRD therapy option. Now, for the first time, dairy producers have access to the premier fluoroquinolone class of antimicrobials.

A key senator said negotiators were considering tighter subsidy limits on wealthy farmers to address some of Bush administration’s sharp criticism of the bill.

“We are trying to be responsive to the president’s concerns,” said Sen. Kent Conrad, D-N.D.

A deal reached among congressional negotiators earlier this week would increase by as much as 25 percent the amount of direct payments that millionaire grain and cotton farms could collect each year.

A married couple with as much as $1.9 million in annual net farm income could qualify for the maximum $100,000 in payments. The payments, a relic of the 1996 farm bill, are fixed according to the crops that farms have historically grown.

Bush has problems with a number of items in the bill lawmakers are writing, including a two-year extension of the 54-cent-per-gallon tariff on imported fuel ethanol, according to lawmakers. But the administration has directed most of its rhetorical fire on the bill’s subsidy eligibility rules.

“I don’t think there’s any question now that we can get this done by the eighth of May,” said Rep. Collin C. Peterson, the Minnesota Democrat who heads the Agriculture Committee.

A key breakthrough came when senior lawmakers, after an hours-long huddle in an ornate room in the Capitol, agreed on a $1.7 billion package of tax breaks to be included in the bill, and on how to finance the overall package.

The outline includes an $861 million increase for nutrition programs, partially paid for by slashing crop subsidies by $400 million and cutting a program to pay farmers for ruined crops by $250 million.

It also reflected the political and economic realities surrounding this year’s tough farm bill talks. With crop prices high and the federal budget squeezed, there’s less appetite in Washington for big farm programs, especially among congressional leaders who hail from urban areas. The sharp economic slump has many lawmakers focused more on job losses and home foreclosures than farm policy.

To close stubborn funding gaps, negotiators agreed to cut an ethanol tax credit that has previously been seen as untouchable because of its popularity in politically potent Iowa. They sliced $1 billion in support for blending fuel with the corn-based additive, bringing the per-gallon credit from 51 cents to 45 cents. They boosted support for another form of the clean-burning fuel additive — cellulosic ethanol, which is made from plant matter — by $400 million.

The tentative deal includes a $3.8 billion disaster package, trimmed from the $4 billion farm-state lawmakers had initially sought.

The tax package includes several elements sought by powerful lawmakers, including a tax break for race horse owners important to Sen. Mitch McConnell, R-Ky., the minority leader, and one that benefits timber companies championed by Baucus. Also included were trade preferences for Caribbean countries, a priority for Rangel, whose district has a high concentration of people of Caribbean descent.

House and Senate negotiators, meeting minutes after the White House issued Bush’s statement, said they would make a final effort to wrap up the new law. The optimism was mixed with sober words that time is short.

“Maybe that’s where we end up, I don’t know,” said Senate Agriculture Committee chairman Tom Harkin, referring to Bush’s idea of a one-year extension. The Iowa Democrat oversees the effort to write a final version of the farm bill.

Farm bills are omnibus legislation that control dozens of programs including nutrition, stewardship, specialty crops and biofuels. Nutrition would get two-thirds of the estimated $600 billion in outlays over the coming decade.

Discussions have deadlocked for weeks over how to pay for a $10 billion spending increase for the new law and Senate insistence on a $2.4 billion tax package. While traveling in Louisiana, Bush said in a statement there were no signs that negotiators would agree soon on a reform-minded farm law that does not raise taxes.

“I have no doubt that some very smart scientists will also find ways to crack milk into a myriad of elements and lay the foundations for entirely new biotech industries,” said Minister of Agriculture Jim Anderton.

Massey University’s Riddet Institute co-director Harjinder Singh agreed, and said Mr Anderton had it right on the dot.

“It’s like a gold mine, if you like.”

Mr Anderton said there were exciting business opportunities in fields that used milk as an ingredient, able to be sold for as much as $US4000 a tonne. Nutriceuticals could sell for even more, he said.

At issue is the use of Posilac, or recombinant bovine somatotropin, a synthetic hormone made by Creve Coeur-based Monsanto that increases the milk production of dairy cows. Certain dairies and retailers are labeling milk as being produced without its use, charging more and implying that it is healthier than other milk.

The Food and Drug Administration has found no difference in milk that comes from Posilac-treated cows. It says there are no related human health concerns. Consumer advocates say shoppers should have all available information about their milk.

“White Gold’s TV spots and the new Web site are engaging and quirky with humor that we believe young people will relate to,” says Steve James, executive director of the California Milk Processor Board (CMPB), the advertiser responsible for GOT MILK? and for signing White Gold as the face behind its new ad campaign.

“As sodas and energy drinks become more and more popular among teens, we want to show teenagers that milk is cool, if not cooler and healthier than other beverages in the supermarket.”

House members object to several tax breaks in the Senate bill, including provisions to help owners of race horses, landowners who find endangered species on their property and those involved in litigation over the Exxon Valdez oil spill.

Congress also is arguing with the Bush administration over how the bill will be financed. With so many issues to resolve, Peterson said Congress may need more time beyond the one additional week approved by the House. The Senate is expected to vote on the extension before the law expires on Friday. President Bush said last month that lawmakers should stop relying on such short-term fixes and extend current law for at least a year if it expired without a new law in place. The 2002 law originally expired Sept. 15.

Protesters say the move would jeopardize grants from the U.S. Department of Agriculture and threaten a host of programs, from the Jersey Fresh marketing campaign that promotes Garden State produce to the popular farmland preservation program. Some also fear that without a chief gardener in the Garden State, loss of farms to development will be accelerated.
“We need to preserve our agriculture heritage in New Jersey,” Barbara Byrnes, a protester, said

A brigade of farmers in tractors, front-end loaders and pickup trucks some full of hay rolled into Trenton late Tuesday morning. Some horse breeders brought their prized possessions to the steps of the capitol. Others carried baby lambs in their arms.

“We grow carrots for Campbell Soup. We grow tomatoes for Dom Pepano tomato sauce. And we grow wheat and grain for Perdue. Without the department of agriculture, you know, what next?” Byrnes said.

Corzine didn’t respond publicly to the protesters.

The ODA says the regulations are intended to level the playing field between the two milk sources but processors who accept milk from producers who use rBST are opposed in principle to such labeling because they assert it unfairly implies milk derived from cows given rBST is compositionally different to milk sourced from cows not given rBST when it is not, thus misleading the public.

The ODA revision retains the FDA disclaimer but allows it to be half the size of the ‘free from growth hormones’ claim. Processors have been granted 120 days to comply.

The Washington DC-based International Dairy Foods Association (IDFA) said while the revision was a step in the right direction it did not “fully address the concerns raised by dairy processors and consumers.”

“These changes are a step in the right direction, but they still inhibit dairy processors from conveying information about the use of artificial hormones that consumers want to know,” said Jerry Slominski, IDFA senior vice president.

Chairman Tom Harkin told reporters he hoped for agreement within two days on how to pay for a $10 billion spending increase for the farm bill. With that in hand, House and Senate negotiators could then write a final version of the law, which is six months overdue.

“Nutrition remains a big sticking point with the House,” Harkin said, referring to public nutrition programs such as food stamps. “They are going to want that number very solid. I don’t know if they’re going to accept $9.5 billion or not.”

Agriculture Committee leaders agreed tentatively on a $9.5 billion increase for nutrition over 10 years. Chairman Charles Rangel of the House Ways and Means Committee, who is working on farm bill funding, says nutrition deserves ample funding because food prices are rising faster than the inflation rate.

Harkin said farm leaders tried to balance spending among programs. Senators from the northern Plains, for example, demand a disaster-relief fund. House members like Rangel, a New York Democrat, put higher value on nutrition assistance.

The current goal of a $10 billion increase means less money all around. Besides more money for nutrition, there is pressure in Congress to boost stewardship programs, encourage development of renewable fuels and to tighten crop subsidy rules.

“We need to have the White House more engaged in this, more so than they have been,” Reid said while outlining the Senate agenda for the next few weeks.

Congress is six months behind schedule to pass an omnibus farm bill that would spend as much as $290 billion over five years on public nutrition, land stewardship, crop subsidies, biofuels and other programs. Nutrition would get two-thirds of the money.

Work on the bill has been slowed by disputes over jurisdiction over some land stewardship work and whether to include a stand-by disaster relief program. Nor was there agreement over spending cuts or new revenue to pay for the bill.

President George W. Bush says he will veto the farm bill if it increases taxes, uses budget gimmicks to disguise overspending or fails to make farm-program reforms.

The White House says, if there are sufficient reforms, it will allow a $10 billion increase from levels already going to agriculture.

“We’ve cut back to the president’s numbers. Now what we’re working on are the offsets,” said Reid.

“Our target audience this year is teenagers,” says CMPB Executive Director Steve James. “With soda and energy drink consumption increasing rapidly while milk intake among teenagers is dropping, we feel we need to reach out to teens in their natural environment — the Internet — before losing these consumers forever. We want to reinforce the health benefits of milk with a fun message this audience will embrace.”

District 4 - Barron and Polk Counties
Candidate: Lyle K. Jensen (incumbent)

District 7 - Clark County
Candidate: Bill Herr (incumbent)
Candidate: Jeff Meyer

District 10 - Brown, Door and Kewaunee Counties
Candidate: Roger Buresh (incumbent)

District 13 - Buffalo, Pierce and Pepin Counties
Candidate: Lanette Harsdorf (incumbent)
Candidate: Dianne Erickson

District 16 - Fond du Lac, Green Lake and Marquette Counties
Candidate: Romona Averbeck (incumbent)

District 19 - Columbia and Dodge Counties
Candidate: Richard W. Fink (incumbent)
Candidate: Sarah E. Lloyd
Candidate: Russell Warmka

District 22 - Grant County
Candidate: Mary Wackerschauser (incumbent)
Candidate: Laurayne Fischer
Candidate: Ann Kieler

In January, Tewksbury predicted milk prices to drop $4 per hundredweight this spring. If that happens, the price farmers would receive for their milk would drop to $18, while the cost to produce it would jump to over $30.

“It may be worse than we predicted,” Tewksbury said. “Dairy farmers are not receiving a realistic price that covers the average cost of producing milk.”

Price-support programs, such as the Milk Income Loss Contract (MILC), are ineffective, according to Wisconsin dairy farmer Joel Greeno.

“If milk prices were to drop to levels that the MILC would kick in, I would be losing $3,375 a month,” he said. “It would be pretty hard to pay the bills on that.”

Minnesota dairy farmer LoriJayne Grahn said the cost of production factor is critical because dairy farmers have no ability to raise their prices. The answer, she said, lies in the cost of production, and the matter almost became a reality last year when U.S. Sens. Robert Casey, D-Scranton, and Arlen Specter, R-Philadelphia, introduced Senate Bill 1722.

Tewksbury said the bill incorporates national cost of production into the pricing formula, eliminates hauling charges for farmers and implements a supply management program that can kick in when milk exports equal imports. The bill has sat in the Senate Committee on Agriculture, Nutrition and Forestry since last June.

“Presently, the value of milk across the country is basically the same, and dairy farmers from every state agree we need a new pricing formula,” Tewksbury said. “We’re hoping we can get bill 1722 moving or something similar to it.”

The secretary announced interim steps such as more random inspections of slaughterhouses and more frequent unannounced audits of the nearly two dozen plants that process meat for federal school lunch programs.

But he deflected calls from Sen. Herb Kohl (D-Wis.), the subcommittee chairman, for the government to ban all downer cows from the food supply, increase penalties for violators and require installation of 24-hour surveillance cameras in processing plants.

“The penalties are strong and swift, as we have shown,” Schafer said. “Financially, I don’t see how this company can survive. People need to be responsible and, from USDA’s standpoint, they will be held responsible. . . . They broke the rules. That does not mean the rules are wrong. I believe the rules are adequate.”

The hearing came 11 days after Agriculture officials ordered the recall of 143 million pounds of beef processed by Westland/Hallmark, including 37 million pounds that had gone to school lunch and other public nutrition programs. No illnesses have been linked to the recalled meat.

J. Patrick Boyle, president of the American Meat Institute, a trade association, called the Westland/Hallmark plant “an anomaly, an extreme circumstance.”