Congressman Rick Larsen's Online Office

Washington, D.C. — Today, U.S. Representative Rick Larsen (WA-02), along with Congressmen Jim Costa (CA-20), Peter Welch (VT-AL), Joe Courtney (CT-02), and John B. Larson (CT-01), introduced legislation to protect local jobs and strengthen the dairy industry. The Dairy Price Stabilization Act promotes market stability for farmers and helps family farmers protect jobs and grow their businesses.

“The Washington state dairy industry is the tenth largest in the nation. The 128 dairy farms in Whatcom County produce the 2nd greatest amount of milk in the state,” said Rep. Larsen. “This means many local jobs and hardworking families depend on stability in the dairy industry. Every day, countless farmers and families throughout Northwest Washington suffer through the roller coaster that is the dairy market.”

“The dairy price crisis is devastating our local economy and the ability to create and sustain jobs.”

“Rep. Costa’s bill makes important steps toward stabilizing the price of milk, which is a top priority for dairy farmers. While I recognize this is only a first step in responding to the concerns that dairy farmers have around the country, this is an important step and I am happy to support Rep. Costa’s legislation today.”

In 2009, dairy farms across the nation were devastated by 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.   

“Congressman Larsen has been an active advocate for sound dairy policy since his first days in Congress,” said Jim Werkhoven, Chairman of the Board of Darigold, Inc. and the Northwest Dairy Association.  “We appreciate Mr. Larsen’s continued interest and for his sponsorship of Congressman Costa’s Dairy Price Stabilization Program.  We believe this proposal is a positive step in creating the necessary dialogue on dairy policy to bring the entire industry together.”

The Dairy Price Stabilization Act would help stabilize dairy prices by better aligning supply and demand. Under the program, 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.

Dairies choosing to increase their market share would pay a fee during the first year of expansion which is paid out to their fellow dairy farmers who are maintaining their current share of the market. This creates a rational system that allows the market to absorb increases in production by providing a tangible financial incentive for most dairies to manage their production growth.

"I would like to thank Representative Larsen for his support on this legislation,” said Mike Schoneveld, President of the Whatcom Dairy Federation. “The dairy industry has worked on this production stabilization plan for three years and we appreciate Rick Larsen's support now that it is a bill."

The structure of the bill is based on unbiased economic analysis and modeling conducted in the past 18 months. Both the growth rate and market access fee would be determined based on market indicators including feed costs which are the largest cost factor for producers in states like California. A producer board of directors would be established to advise the Secretary of Agriculture on any necessary adjustments to program operations. The bill empowers farmers by allowing them to vote on whether to enact the program and, three years after it commences, to vote on whether to continue it.

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