Sending Office: Honorable Peter Welch
Sent By:
Mark.Fowler@mail.house.gov
Deadline Extended: Wed Nov 14
Dear Colleague:
We invite you to join us in sending a letter to USDA Secretary Perdue and OMB Director Mulvaney requesting the Administration utilize its existing statutory authority to establish a milk balancing program. The letter also requests an end to existing tariffs
and reestablishment of normal trading relationships with our international partners.
Over the past four years, milk prices have remained low for farmers across the country. For many, prices remain below the cost of production. This economic hardship has been exacerbated by recent trade actions which have strained international relationships
and further suppressed milk prices. It is critical that the Administration act if we are to save more family farms from going out of business.
While the Market Facilitation Program payments announced by the Administration in August were a helpful start, the size of the dairy payments announced were insufficient. The maximum possible amount provided under this round of payments, $127 million, is
a fraction of the roughly $1 billion in losses the dairy sector has already experienced. More must be done.
Rather than issuing another small, one-time payment, the letter requests the Administration use its existing authority to establish a milk balancing program. Such a program would address an existing market failure, help alleviate the current glut of dairy
products by bringing supply and demand into balance, and stabilize dairy prices. The letter also requests the Administration rescind existing tariffs and allow our agriculture sector to reestablish normal trading relationships with our international partners.
To join the letter, please contact Mark Fowler (Welch) at
mark.fowler@mail.house.gov.
Sincerely,
PETER WELCH JOE COURTNEY
Member of Congress Member of Congress
________________________
November XX, 2018
The Honorable Sonny Perdue The Honorable Mick Mulvaney
Secretary of Agriculture Director
U.S. Department of Agriculture Office of Management and Budget
1400 Independence Avenue SW 725 17th Street NW
Washington, DC 20250 Washington, DC 20503
Dear Secretary Perdue and Director Mulvaney:
Given the significant challenges facing American dairy farmers, we write to request you provide relief from chronically low dairy prices by establishing a milk balancing program.
Across the country, dairy farmers are experiencing severe economic stress due to an oversupply of milk, low milk prices, and negative international trade pressures. This year is the fourth in a row of low milk prices and there appears to be no end in sight.
The price many producers receive for milk is below the cost of production at a time when retaliatory tariffs imposed by our trading partners have added to the burden of struggling dairy farmers.
We appreciate the Administration’s efforts to address these challenges. The Market Facilitation Program (MFP) will help producers cope with low prices and the loss of foreign markets. However, the possible assistance provided, $127 million, is a fraction
of the total impact trade actions have had on the industry. Numerous economic analyses indicate that dairy farmer losses due to retaliatory tariffs will exceed $1 billion in 2018 alone.[1] Moreover, the Administration’s
decision to leave in place tariffs on our trading partners continues to exacerbate the situation, significantly hindering U.S. dairy exports and directly necessitating the need for additional relief. If dairy farmers are to survive, it is essential we do more.
The Administration has the authority to address this challenge and to provide relief to the dairy industry. As you know, Section 5 of the Commodity Credit Corporation Charter Act affords the U.S. Department of Agriculture (USDA) wide latitude to support
commodity prices and remove surplus commodities. While previous federal appropriations laws limited USDA’s ability to use its discretionary authority under this statute, the Fiscal Year 2018 appropriations law removed all such restrictions.
We respectfully request that you utilize this existing statutory authority to initiate a voluntary, incentive-based balancing program available to all producers to stabilize domestic milk markets. Small reductions in milk production can have a positive impact
on price. As Agri-Mark recently estimated[2], a two percent reduction in production would be enough to drive prices higher. Knowing that USDA is likely to take further action this year under the MFP program, we
believe a voluntary, incentive-driven program that balances supply and demand would provide long-term positive impacts for farmers dealing with foreign market disruptions and oversupply. The resulting increase in dairy prices would also reduce farmer dependence
on other federal support programs.
Furthermore, we encourage the Administration to rescind existing tariffs and reestablish normal trading relationships with our international partners. International markets represent a critical component of the U.S. dairy sector. Mexico, for instance, accounts
for roughly one-quarter of foreign demand for U.S. dairy products, while China accounted for a total of $577 million in U.S. dairy exports in 2017 alone. Access to these markets plays a critical role in the health of the U.S. dairy industry. We urge the Administration
to work diligently to restore this market access, including by working with Mexico to end the existing 25 percent tariff on U.S. cheese exports to Mexico as part of the final United States-Mexico-Canada Agreement.
While we will continue pursuing legislative solutions to these challenges, these actions will provide immediate and much needed assistance to producers across the country. We look forward to working with you to make this happen.
Sincerely,
PETER WELCH JOE COURTNEY
Member of Congress Member of Congress
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