Number: RL34036
Title: Dairy Policy and the 2008 Farm Bill
Authors: Ralph M. Chite, Science, Resources, and Industry Division 
Abstract: Two ongoing federal programs that support the price and income received by dairy farmers - the dairy price support program and the Milk Income Loss Contract (MILC) program - were reauthorized with modifications in the Food, Conservation, and Energy Act of 2008 (P.L. 110-234, the 2008 farm bill). The MILC program allows participating dairy farmers to receive a government payment when the farm price of milk used for fluid consumption falls below an established target price. The enacted 2008 farm bill extends the MILC program through FY2012 at the existing level of support, but increases the payment percentage rate and the amount of eligible production. The target price also can be increased in any month that feed costs are above a certain threshold. The MILC program is supported by milk producer groups in the Northeast and the Upper Midwest. Large farmers, particularly in the West, contend that the program payment limit is biased against them. Market prices for farm milk have been substantially above the target price for more than a year, precluding the need for MILC payments.
Pages: 17
Date: June 13, 2008