I 

112TH CONGRESS 

1ST SESSION H. R. 3372 

To amend the Agricultural Adjustment Act to deregulate the Federal milk 

marketing order program, to publish competitive milk price survey data, 

and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

NOVEMBER 4, 2011 

Mr. WALSH of Illinois introduced the following bill; which was referred to the 

Committee on Agriculture 

A BILL 

To amend the Agricultural Adjustment Act to deregulate 

the Federal milk marketing order program, to publish 

competitive milk price survey data, and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Dairy Pricing Deregu5 lation Act’’. 

6 SEC. 2. REFORM OF FEDERAL MILK MARKETING ORDERS. 

7 (a) TERMS AND CONDITIONS OF MILK AND MILK

8 PRODUCTS ORDERS.—Section 8c of the Agricultural AdVerDate Mar 15 2010 23:54 Nov 09, 2011 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3372.IH H3372

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1 justment Act (7 U.S.C. 608c), reenacted with amendments 

2 by the Agricultural Marketing Agreement Act of 1937, is 

3 amended— 

4 (1) in subsection (5)— 

5 (A) by striking paragraphs (C), (D), (H), 

6 (I), (J), and (K); 

7 (B) by amending paragraph (A) to read as 

8 follows: 

9 ‘‘(A) Fixing a differential which all han10 dlers of milk used for fluid purposes shall pay 

11 with respect to such milk, and the time when 

12 payments shall be made, for milk purchased 

13 from producers or associations of producers. 

14 Such differential shall be uniform as to all such 

15 handlers, subject only to adjustment for the lo16 cations at which delivery of such milk is made 

17 to such handlers.’’; 

18 (C) by amending paragraph (B) to read as 

19 follows: 

20 ‘‘(B) Providing for the payment to all pro21 ducers and associations of producers delivering 

22 milk to any fluid milk handler regulated by the 

23 order, or to any non-fluid milk handler which 

24 supplies milk to such fluid milk handler in con25 formity with such requirements as the SecVerDate Mar 15 2010 23:54 Nov 09, 2011 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3372.IH H3372

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1 retary may establish, a proportionate share, 

2 based on volume of delivered milk, of all dif3 ferentials required to be paid under paragraph 

4 (A) of this subsection (5), subject only to ad5 justment for the locations at which delivery of 

6 such milk is made.’’; 

7 (D) by amending paragraph (F) to read as 

8 follows: 

9 ‘‘(F) Nothing contained in this subsection 

10 is intended or shall be construed to prevent a 

11 cooperative marketing association qualified 

12 under the provisions of the Act of Congress of 

13 February 18, 1922, known as the ‘Capper-Vol14 stead Act’ (7 U.S.C. 291 et seq.), engaged in 

15 making collective sales or marketing of milk or 

16 its products for the producers thereof, from 

17 blending the net proceeds of all of its sales of 

18 milk or its products in all markets, and making 

19 distribution thereof to its producers in accord20 ance with the contract between the association 

21 and its producers.’’; 

22 (E) by amending paragraph (L) to read as 

23 follows: 

24 ‘‘(L) Providing that adjustments in pay25 ments by handlers under paragraph (A) need 


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1 not be the same as adjustments to producers 

2 under paragraph (B).’’; 

3 (F) by amending paragraph (M) to read as 

4 follows: 

5 ‘‘(M)(i) APPLICATION OF REQUIRE6 MENTS.—Notwithstanding any other provision 

7 of this section, a milk handler described in 

8 clause (ii) shall be subject to all of the fluid 

9 milk differential requirements of a Federal milk 

10 marketing order issued pursuant to this section 

11 applicable to the county in which the plant of 

12 the handler is located, if the handler has pack13 aged fluid milk product route dispositions, or 

14 sales of packaged fluid milk products to other 

15 plants, in a marketing area located in a State 

16 that requires handlers to pay minimum prices 

17 for raw milk purchases. 

18 ‘‘(ii) COVERED MILK HANDLERS.—Except 

19 as provided in clause (iv), clause (i) applies to 

20 a handler of Class I milk products (including a 

21 producer-handler or producer operating as a 

22 handler) that— 

23 ‘‘(I) operates a plant that is located within 

24 the boundaries of a Federal order milk marVerDate Mar 15 2010 23:54 Nov 09, 2011 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3372.IH H3372

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1 keting area (as those boundaries are in effect as 

2 of April 11, 2006); 

3 ‘‘(II) has packaged fluid milk product 

4 route dispositions, or sales of packaged fluid 

5 milk products to other plants, in a milk mar6 keting area located in a State that requires 

7 handlers to pay fluid milk differentials for raw 

8 milk purchases; and 

9 ‘‘(III) is not otherwise obligated by a Fed10 eral milk marketing order, or a regulated milk 

11 pricing plan operated by a State, to pay min12 imum class prices or fluid milk differentials for 

13 the raw milk that is used for such dispositions 

14 or sales. 

15 ‘‘(iii) OBLIGATION TO PAY FLUID MILK

16 DIFFERENTIALS.—For purposes of clause 

17 (ii)(III), the Secretary may not consider a han18 dler of Class I milk products to be obligated by 

19 a Federal milk marketing order to pay fluid 

20 milk differentials for raw milk unless the han21 dler operates the plant as a fully regulated fluid 

22 milk distributing plant under a Federal milk 

23 marketing order. 

24 ‘‘(iv) CERTAIN HANDLERS EXEMPTED.— 

25 Clause (i) does not apply to— 


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1 ‘‘(I) a handler (otherwise described in 

2 clause (ii)) that operates a nonpool plant (as 

3 defined in section 1000.8(e) of title 7, Code of 

4 Federal Regulations, as in effect on the date of 

5 the enactment of this subparagraph); 

6 ‘‘(II) a producer-handler (otherwise de7 scribed in clause (ii)) for any month during 

8 which the producer-handler has route disposi9 tions, and sales to other plants, of packaged 

10 fluid milk products equaling less than 

11 3,000,000 pounds of milk; or 

12 ‘‘(III) a handler (otherwise described in 

13 clause (ii)) for any month during which— 

14 ‘‘(aa) less than 25 percent of the total 

15 quantity of fluid milk products physically re16 ceived at the plant of the handler (excluding 

17 concentrated milk received from another plant 

18 by agreement for other than Class I use) is dis19 posed of as route disposition or is transferred 

20 in the form of packaged fluid milk products to 

21 other plants; or 

22 ‘‘(bb) less than 25 percent in aggregate of 

23 the route disposition or transfers are in a mar24 keting area or areas located in one or more 


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1 States that require handlers to pay minimum 

2 prices for raw milk purchases.’’; and 

3 (G) by amending paragraph (N) to read as 

4 follows: 

5 ‘‘(N) EXEMPTION FOR CERTAIN MILK

6 HANDLERS.—Notwithstanding any other provi7 sion of this section, no handler with distribution 

8 of Class I milk products in the marketing area 

9 described in Order No. 131 shall be exempt 

10 during any month from any fluid milk differen11 tial requirement established by the Secretary 

12 under this subsection if the total distribution of 

13 Class I products during the preceding month of 

14 any such handler’s own farm production ex15 ceeds 3,000,000 pounds.’’; and 

16 (2) by amending subsection (18) to read as fol17 lows: 

18 ‘‘(18) FLUID MILK DIFFERENTIALS.—The Sec19 retary of Agriculture, in prescribing any term in any 

20 marketing agreement or order, or amendment there21 to, relating to milk or its products, if such term is 

22 to fix the differential to be paid to producers or as23 sociations of producers, shall fix such differential as 

24 follows. Such differentials shall during the first year 

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1 lation Act be equal to the differentials for milk used 

2 for fluid purposes as they existed under federal milk 

3 marketing orders on January 1, 2011, subject to all 

4 location adjustments as they existed under federal 

5 milk marketing orders on such date. Such differen6 tials shall in each successive year be reduced by an 

7 amount equal to 20 percent of the differentials that 

8 existed during the first year after the effective date 

9 of such Act, and shall be discontinued in the fifth 

10 year after the effective date of such Act.’’. 

11 (b) CONFORMING AMENDMENT.—Section 10(b)(2)(i) 

12 of the Agricultural Adjustment Act (7 U.S.C. 

13 610(b)(2)(i)), reenacted with amendments by the Agricul14 tural Marketing Agreement Act of 1937, is amended by 

15 striking ‘‘each handler subject thereto’’ and inserting 

16 ‘‘each fluid milk handler subject thereto and each non17 fluid milk handler which supplies milk to such fluid milk 

18 handler’’. 

19 (c) NOTICE AND COMMENT.—The Secretary of Agri20 culture shall use the notice and comment procedures pro21 vided in section 553 of title 5, United States Code, to im22 plement the requirements of the amendments made by 

23 subsection (a) of this section. 

24 (d) SURVEYS.— 


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1 (1) IN GENERAL.—The Secretary of Agriculture 

2 shall survey and publish on a regular basis data re3 garding the payments made by all handlers of milk 

4 used for any purpose for milk purchased from pro5 ducers or associations of producers. 

6 (2) BASES FOR PUBLICATION.—The Secretary 

7 shall publish such data on a national weighted-aver8 age basis and on a regional basis with respect to as 

9 many multi-state regions as the Secretary deter10 mines to be of practical use. 

11 (3) MANDATORY PARTICIPATION.—Participa12 tion in such surveys by handlers shall be mandatory. 

13 SEC. 3. EFFECTIVE DATE. 

14 The amendments made by this Act shall be effective 

15 on the first day of the first month beginning one year after 

16 the date of the enactment of this Act. 

Æ 


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