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Strengthening The Dairy Industry

17 May 2010

US - The Dairy Price Stabilisation Act promotes market stability and individual dairy farmers' ability to grow their own business. The legislation has been introduced by California Congressman Jim Costa.

"While periods of boom and bust are not new to the dairy industry, our dairy families cannot afford another year of low milk checks that don’t even cover the cost of production," said Mr Costa.

"The dairy price crisis is devastating our local economy and ability to create and sustain jobs. This bill will help the dairy industry get back on track and curb the milk price volatility that is driving dairy farmers in the Valley and our nation out of business."

In 2009, dairy farms throughout the country experienced one of the worst price crises of the last 40 years. Last June, prices dropped to an average of over $6.00 per hundredweight, dramatically below the cost of production. An inconsistent national support system and the absence of a national supply management plan has exacerbated the price instability and created an unsustainable business cycle for many dairy families.

In 2009, America's roughly 65,000 dairies lost over $12 billion. Sharp losses forced dairy farmers to lay off workers and, in many cases, shutter their operations.

The Dairy Price Stabilisation Act would help stabilise dairy prices by better aligning supply and demand. Under the programme, individual dairies would have the choice of either maintaining their current production level (plus an allowable year-over-year growth rate based on market indications) or expanding their production and increasing their share of the market.

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