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Baldwin urges caution on milk program changes

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Associated Press | November 7, 2013

MILWAUKEE — Sen. Tammy Baldwin and other members of Wisconsin's congressional delegation have sent a letter to lawmakers working on a new farm bill expressing concern that it might contain provisions that would put dairy farmers in Wisconsin at a disadvantage to those in other states.

Negotiations started late last month in Congress to merge the House and Senate bills into final legislation funding food and agriculture programs. The Senate bill calls for the U.S. Department of Agriculture to re-examine how it sets the minimum price for milk used to make cheese. The provision was partly a response to complaints about the volatility of milk prices, which makes dairy farming risky.

Baldwin, a Democrat, and representatives from both parties said in a letter dated Tuesday that federal rules currently set the price for milk for cheese lower than milk for drinking, and that hurts Wisconsin farmers who mostly sell to cheesemakers.

If changes are to be made, the letter said, the USDA should look at all the pricing formulas. The agency divides milk into four price categories, depending on how it's used — in beverages, cheese, whey and powdered milk, or yogurt and ice cream.

The pricing structure has been a problem for Wisconsin farmers and cheesemakers.

Mark Stephenson, a dairy economist at the University of Wisconsin-Madison, said farmers have an incentive to shift milk to beverage production if it is consistently valued more than making cheese. The problem could made worse if the price formula for one category was changed and others weren't.

Republican Rep. Reid Ribble, who served on the House Agriculture Committee and signed the letter, said in a statement that he just wanted to make sure "Wisconsin dairy farmers are getting a fair shake in the process."



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