Letter to The Honorable Peter R. Orszag, Director, Office of Management and Budget

Letter

Leahy-Led Coalition
Steps Up Drive
For A Short-Term Boost
In U.S. Dairy Price Supports

Fresh on the heels of Wednesday's strategy meeting with Agriculture Secretary Tom Vilsack, a multi-region coalition of senators organized by Sen. Patrick Leahy (D-Vt.) has sent a letter to White House Budget Director Peter Orszag, asking his cooperation in implementing a short-term boost in USDA's floor price for purchasing dairy products.

In the letter to Office of Management and Budget (OMB) Director Orszag, 23 senators ask the Administration to use discretionary authority granted earlier by Congress to raise the price the government pays to buy dairy goods in the open market. Leahy and the coalition believe that raising the floor price would help serve as a catalyst for ending the free fall of milk prices, which is threatening dairy farms in Vermont and across the nation. Sen. Bernie Sanders (I-Vt.) is also one of the signatories.

The senators tell Orszag, "We want to impress on 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 thousands of rural communities."

In a meeting Wednesday on Capitol Hill, the senators and Vilsack agreed on the merits of raising the dairy floor price and the coalition agreed to follow up with Orszag, a key decision maker in using the discretionary authority. Leahy, the Senate Agriculture Committee's most senior member of either party, organized the meeting and the appeal to Orszag.

[The text of the letter to Director Orszag follows:]

July 28, 2009

The Honorable Peter R. Orszag
Director
Office of Management and Budget
Eisenhower Executive Office Building
1650 Pennsylvania Avenue, NW
Washington, D.C. 20503

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 thousands 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 through 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.

Sincerely,

(signed by 23 senators, headed by Sen. Patrick Leahy and Sen. Herb Kohl)

Source