May 8, 2010 Dairy Market Reporting May Expand
The Dairy Policy Action Coalition (DPAC) reports a letter circulated in Congress, seeking support for daily electronic reporting of dairy product prices, has garnered signatures from five U.S. Senators and 19 members of the House of Representatives from 11 states, according to Sherry Bunting.
The letter, co-authored by Sen. Arlen Specter (D-Pa.) and Rep. Tim Holden (D-Pa.), supports funding in fiscal year 2011 Senate and House appropriations bills to implement section 1510 of the 20008 Farm Bill, which authorizes more frequent electronic reporting of dairy commodity prices and sales volumes, along with quarterly auditing instead of annual auditing.
DPAC leaders say price monitoring is necessary to reduce the influence of the Chicago Mercantile Exchange on producer milk prices, which they said recorded prices only for the thinly traded spot surplus market. Accurate, timely reporting is also necessary for producers and processors to make risk management decisions, DPAC said.
Based on previous experience with beef price reporting, USDA estimated startup costs for electronic reporting – covering programming and personnel to get dairy plants online with electronic reporting, enabling plants to record and automatically transmit their daily product sales and volumes – would be about $600,000. Also, quarterly audits (USDA’s National Ag Statistics Service currently conducts an annual audit) would add $1 million-$2 million annually.
It is about time dairy producers have a market that reflects actual conditions rather than the manipulation by a token group of commodity buyers.