Pumping up MILC.

Byline: Jim Dickrell

If Sen. Tom Harkin (D., Iowa) has his way, Milk Income Loss Contract (MILC) payments could increase substantially beginning in fiscal year 2009.

Harkin is chairman of the Senate Agriculture Committee. In his achairmana[TM]s mark-upa of the 2007 Farm Bill, Harkin proposes increasing the payment factor to 45% of the difference between $16.94 and the Class I price in Boston. The current payment rate is 34%. In addition, the payment limit quantity would be increased from 2.4 million lb. annually (roughly 120 cows) to 4.15 million lb. (210 cows).

The proposal would also establish an 18-member commission to review the Federal Order Milk Marketing System. It would also require that USDA issue decisions on proposed Federal Order amendments within one year after a hearing is initiated.

The achairmana[TM]s mark-upa also allow proprietary handlers to offer forward pricing programs on Class II, III and IV milk. The program would sunset with the Farm Bill in 2012, but forward contracts could be written through Sept. 30, 2015.

The proposals cleared the Senate Ag Committee today but must now move to the full Senate, and ultimately, a conference committee with the House of Representatives.

The Senate Ag Committee bill does not include an extension of the 15 cent/cwt assessment for research and promotion on imported dairy products. The National Milk Producer Federation supports such an extension; the International Dairy Foods Association does not.