SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Dairy Producer Income Protection Act 
of 2011''.

SEC. 2. MILK INCOME LOSS CONTRACT PROGRAM.

    (a) In General.--Section 1506 of the Food, Conservation, and Energy 
Act of 2008 (7 U.S.C. 8773) is amended--
            (1) in subsection (c)(3)--
                    (A) in subparagraph (A), by inserting ``and'' after 
                the semicolon at the end;
                    (B) in subparagraph (B)--
                            (i) by striking ``ending August 31, 2012'' 
                        and inserting ``thereafter''; and
                            (ii) by striking ``; and'' and inserting a 
                        period; and
                    (C) by striking subparagraph (C);
            (2) in subsection (d)--
                    (A) in the subsection heading, by striking ``for 
                Feed Prices''; and
                    (B) by adding at the end the following:
            ``(4) Payment rate adjustments.--
                    ``(A) In general.--Subject to paragraphs (1) 
                through (3), for each of fiscal years 2012 through 
                2015, the amount specified in subsection (c)(2)(A) used 
                to determine the payment rate for the fiscal year shall 
                be the payment rate for the preceding fiscal year, as 
                adjusted to reflect changes for the 12-month period 
                ending the preceding November 30 in the Consumer Price 
                Index for All Urban Consumers published by the Bureau 
                of Labor Statistics of the Department of Labor.
                    ``(B) Termination of authority.--Effective 
                beginning in fiscal year 2016, the authority for the 
                adjustment described in subparagraph (A) shall 
                terminate.'';
            (3) in subsection (e)(2)(A)--
                    (A) in clause (i), by inserting ``and'' after the 
                semicolon at the end;
                    (B) in clause (ii)--
                            (i) by striking ``for the period'' and all 
                        that follows through ``2012'' and inserting 
                        ``effective beginning October 1, 2008''; and
                            (ii) by striking ``; and'' and inserting a 
                        period; and
                    (C) by striking clause (iii); and
            (4) in subsections (g) and (h)(1), by striking ``September 
        30, 2012'' each place it appears and inserting ``September 30, 
        2017''.
    (b) Offsets.--
            (1) Repeal of permanent price support authority for milk.--
                    (A) In general.--Section 201 of the Agricultural 
                Act of 1949 (7 U.S.C. 1446) is amended--
                            (i) in subsection (a), by striking 
                        ``milk,''; and
                            (ii) by striking subsections (c) and (d).
                    (B) Conforming amendment.--Section 301 of the 
                Agricultural Act of 1949 (7 U.S.C. 1447) is amended by 
                inserting ``(other than milk)'' after ``agricultural 
                commodity''.
            (2) Repeal of dairy product price support program.--Section 
        1501 of the Food, Conservation, and Energy Act of 2008 (7 
        U.S.C. 8771) is repealed.
            (3) Repeal of dairy export incentive program.--
                    (A) In general.--Section 153 of the Food Security 
                Act of 1985 (15 U.S.C. 713a-14) is repealed.
                    (B) Conforming amendments.--Section 902(2) of the 
                Trade Sanctions Reform and Export Enhancement Act of 
                2000 (22 U.S.C. 7201(2)) is amended--
                            (i) by striking subparagraph (D); and
                            (ii) by redesignating subparagraphs (E) and 
                        (F) as subparagraphs (D) and (E), respectively.

SEC. 3. FEDERAL MILK MARKETING REFORM.

    (a) In General.--Not later than 180 days after the date of 
enactment of this Act, the Secretary of Agriculture shall conduct 
hearings to assess the implications of transitioning Federal milk 
marketing orders from end-product pricing to a competitive pay pricing 
system.
    (b) Requirements.--In conducting hearings under this section, the 
Secretary shall--
            (1) ensure that market administrators conduct a thorough 
        analysis of the reforms to the Federal milk marketing orders 
        proposed by the Maine Dairy Industry Advisory Council and the 
        reforms included in title II of the Dairy Security Act of 2011;
            (2) analyze the implications of transitioning from a 4-
        class system for milk products to a 2-class system;
            (3) explore methods to improve signals for price discovery 
        in the short- and long-term to allow dairy producers to better 
        use risk management tools;
            (4) assess whether a 2-class competitive pay pricing system 
        for milk products would be more or less transparent than the 
        system in effect as of the day before the date of enactment of 
        this Act; and
            (5) analyze the impact of eliminating a minimum regulated 
        price on price volatility in dairy markets.

SEC. 4. BUDGETARY EFFECTS.

    The budgetary effects of this Act, for the purpose of complying 
with the Statutory Pay-As-You-Go Act of 2010, shall be determined by 
reference to the latest statement titled ``Budgetary Effects of PAYGO 
Legislation'' for this Act, submitted for printing in the Congressional 
Record by the Chairman of the Senate Budget Committee, provided that 
such statement has been submitted prior to the vote on passage.
Dairy Producer Income Protection Act of 2011 - Amends the Food, Conservation, and Energy Act of 2008 to extend the milk income loss contract program.

 Revises payment, feed cost adjustment, and payment quantity (pound) calculations.

Eliminates: (1) milk price supports, (2) dairy product price supports, and (3) the dairy export incentive program.

Directs the Secretary of Agriculture (USDA) to conduct hearings to assess the implications of transitioning federal milk marketing orders from end-product pricing to a competitive pay pricing system.
A bill to extend the milk income loss contract program, to require the Secretary of Agriculture to conduct hearings to assess the implications of transitioning Federal milk marketing orders from end-product pricing to a competitive pay pricing system, and for other purposes.