Senator Gillibrand Backs Dairy COOL

US - Following another recall of milk from China, New York’s Senator Gillibrand is pushing for legislation that would require country of origin labeling (COOL) to be expanded to dairy products.

5 March 2010

3 minute read

North America

Just last month, the Chinese government recalled 170 tons of milk powder that had been tainted with melamine. In 2008, milk tainted with melamine killed at least six infants and sickened more than 300,000 in China. According to the US Department of Agriculture (USDA), during the past five years, US dairy imports averaged around $2.7 billion annually.

In addition to Dairy COOL, Senator Gillibrand announced legislation to ensure stable farm milk pricing by requiring cold storage facilities to report their inventories to the USDA.

"We must do more to protect consumers and provide a competitive edge to New York dairy farmers,” Senator Gillibrand said. “All consumers have the right to know whether the milk, yogurt and cheese that we buy are made in Upstate New York or China. This legislation supports both families and farmers by requiring country of origin labelling on all dairy products. With increasing dairy imports and alarming news about tainted products overseas, country of origin labelling provides critical information to parents and all adults that will help them make smart choices for their families.”

Food imports constitute a growing share of what is sold on grocery shelves across the country and what Americans eat. Fifteen per cent of America’s overall food supply is imported from overseas, including $5.2 billion worth of food from China alone. Since 1996, the US agricultural trade surplus shrank from $27 billion to $8 billion in 2006. Individual shipments of food from China increased from 82,000 shipments in 2002 to 199,000 in 2006.

The NASS (National Agricultural Statistics Service) survey, which keeps track of cheese inventory, has a large bearing on the price that farmers get paid for their milk. Currently, the price farmers get for their milk is determined by a complex formula based largely on the price of cheese and how it is traded on the Chicago Mercantile Exchange. Milk is valued by about five per cent of national product being traded. Thus, not having a full picture of cheese inventory potentially has huge impact on the price of milk for all dairy farmers in America.

While Senator Gillibrand is working to find solutions to this arcane pricing system before writing the next farm bill, in the short-term, she wants to ensure that the pricing system is accurate and fully transparent.

Currently, the cold storage facilities that house cheese inventories report their stocks to NASS on a voluntary basis. For the facilities that do not report their stocks, NASS makes estimates of their inventory.

In February 2009, when NASS worked with facilities that had not been making reports to ascertain inventory, they found a six per cent over-reporting between NASS estimates and actual stock. This had the effect of keeping dairy prices artificially low, while inventory was reported higher than actually existed.

Senator Gillibrand plans to introduce legislation which would make the NASS survey mandatory, and require the USDA to conduct periodic audits to ensure that cold storage facilities are properly reporting their inventories. Senator Gillibrand is working with USDA to create a mandatory reporting regime that increases transparency to ensure that the pricing regime, though flawed as it currently stands, is as accurate as possible.