WASHINGTON, DC – U.S. Senators Herb Kohl and Russ Feingold will send the following letter to Peter Orszag, Director of the Office of Management and Budget, this afternoon. They stressed the need for urgent intervention in the dairy sector and called on the Office of Management and Budget to take action to protect the industry from instability.  Please find the text of the letter below.

Dear Mr. Orszag:

            On July 15, 2009, a number of Senators wrote to the Secretary of Agriculture urging timely and substantial action to address the current crisis in the dairy sector.  By this letter we want to impress upon you the seriousness and magnitude of the situation. Unaddressed, current circumstances threaten the long term stability of the industry, the nation’s milk production infrastructure, and the livelihood of thousand of rural communities.

            Section 1501 of the 2008 Farm Bill (P.L. 110-246) updated the Dairy Product Price Support Program (DPPSP) and provides flexibility for the United States Department of Agriculture (USDA) to increase support if necessary.  We understand that the Secretary of Agriculture, in consultation with other senior administration officials, is reviewing proposals to provide relief under this section of the law. We strongly encourage your work toward that end.  

            From January though April of this year, the U.S. all-milk price has averaged $4.80 per hundredweight below the U.S. average cash cost of production.  And in the months since dairy farmers have continued to lose equity.  Consistent anecdotal evidence suggests dairy farmers are losing about $100 per month per cow.   Urgent intervention is needed and we encourage prompt action.

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