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Dairy Policy Issues (CRS Report for Congress)

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Release Date Revised May 24, 2006
Report Number IB97011
Authors Ralph M. Chite, Resources, Science, and Industry Division
Source Agency Congressional Research Service
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Summary:

A temporary pilot program that allows processors to enter into forward price contracts with individual dairy farmers or their cooperatives for certain uses of milk is scheduled to expire December 31, 2004. A forward price contract allows buyers and sellers of a commodity to negotiate a price for the commodity on a future delivery date and insulates both parties from price volatility. Identical bills (H.R. 3308, S. 2565) pending in Congress would convert the pilot program to a permanent one. The bills are supported by dairy processors, but are opposed by the largest organization of dairy cooperatives, which is concerned that the program might undermine federal minimum pricing requirements
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