II 

113TH CONGRESS 

1ST SESSION S. 605 

To improve Federal dairy programs. 

IN THE SENATE OF THE UNITED STATES 

MARCH 19, 2013 

Mrs. GILLIBRAND introduced the following bill; which was read twice and 

referred to the Committee on Agriculture, Nutrition, and Forestry 

A BILL 

To improve Federal dairy programs. 

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 Income Fairness 

5 Act of 2013’’. 

6 SEC. 2. DEFINITION OF SECRETARY. 

7 In this Act, the term ‘‘Secretary’’ means the Sec8 retary of Agriculture. 


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1 Subtitle D—Dairy 

2 PART I—DAIRY PRODUCTION MARGIN PROTEC3 TION AND DAIRY MARKET STABILIZATION 

4 PROGRAMS 

5 SEC. 1401. DEFINITIONS. 

6 In this part: 

7 (1) ACTUAL DAIRY PRODUCTION MARGIN.—The 

8 term ‘‘actual dairy production margin’’ means the 

9 difference between the all-milk price and the average 

10 feed cost, as calculated under section 1402. 

11 (2) ALL-MILK PRICE.—The term ‘‘all-milk 

12 price’’ means the average price received, per hun13 dredweight of milk, by dairy operations for all milk 

14 sold to plants and dealers in the United States, as 

15 determined by the Secretary. 

16 (3) ANNUAL PRODUCTION HISTORY.—The term 

17 ‘‘annual production history’’ means the production 

18 history determined for a participating dairy oper19 ation under section 1413(b) whenever the partici20 pating dairy operation purchases supplemental pro21 duction margin protection. 

22 (4) AVERAGE FEED COST.—The term ‘‘average 

23 feed cost’’ means the average cost of feed used by 

24 a dairy operation to produce a hundredweight of 


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1 milk, determined under section 1402 using the sum 

2 of the following: 

3 (A) The product determined by multiplying 

4 1.0728 by the price of corn per bushel. 

5 (B) The product determined by multiplying 

6 0.00735 by the price of soybean meal per ton. 

7 (C) The product determined by multiplying 

8 0.0137 by the price of alfalfa hay per ton. 

9 (5) BASIC PRODUCTION HISTORY.—The term 

10 ‘‘basic production history’’ means the production 

11 history determined for a participating dairy oper12 ation under section 1413(a) for provision of basic 

13 production margin protection. 

14 (6) CONSECUTIVE 2-MONTH PERIOD.—The term 

15 ‘‘consecutive 2-month period’’ refers to the 2-month 

16 period consisting of the months of January and Feb17 ruary, March and April, May and June, July and 

18 August, September and October, or November and 

19 December, respectively. 

20 (7) DAIRY OPERATION.— 

21 (A) IN GENERAL.—The term ‘‘dairy oper22 ation’’ means, as determined by the Secretary, 

23 1 or more dairy producers that produce and 

24 market milk as a single dairy operation in 

25 which each dairy producer— 


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1 (i) shares in the pooling of resources 

2 and a common ownership structure; 

3 (ii) is at risk in the production of milk 

4 on the dairy operation; and 

5 (iii) contributes land, labor, manage6 ment, equipment, or capital to the dairy 

7 operation. 

8 (B) ADDITIONAL OWNERSHIP STRUC9 TURES.—The Secretary shall determine addi10 tional ownership structures to be covered by the 

11 definition of dairy operation. 

12 (8) HANDLER.— 

13 (A) IN GENERAL.—The term ‘‘handler’’ 

14 means the initial individual or entity making 

15 payment to a dairy operation for milk produced 

16 in the United States and marketed for commer17 cial use. 

18 (B) PRODUCER-HANDLER.—The term in19 cludes a ‘‘producer-handler’’ when the producer 

20 satisfies the definition in subparagraph (A). 

21 (9) PARTICIPATING DAIRY OPERATION.—The 

22 term ‘‘participating dairy operation’’ means a dairy 

23 operation that— 


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1 (A) signs up under section 1412 to partici2 pate in the production margin protection pro3 gram under subpart A; and 

4 (B) as a result, also participates in the sta5 bilization program under subpart B. 

6 (10) PRODUCTION MARGIN PROTECTION PRO7 GRAM.—The term ‘‘production margin protection 

8 program’’ means the dairy production margin pro9 tection program required by subpart A. 

10 (11) SECRETARY.—The term ‘‘Secretary’’ 

11 means the Secretary of Agriculture. 

12 (12) STABILIZATION PROGRAM.—The term 

13 ‘‘stabilization program’’ means the dairy market sta14 bilization program required by subpart B for all par15 ticipating dairy operations. 

16 (13) STABILIZATION PROGRAM BASE.—The 

17 term ‘‘stabilization program base’’, with respect to a 

18 participating dairy operation, means the stabilization 

19 program base calculated for the participating dairy 

20 operation under section 1431(b). 

21 (14) UNITED STATES.—The term ‘‘United 

22 States’’, in a geographical sense, means the 50 

23 States, the District of Columbia, American Samoa, 

24 Guam, the Commonwealth of the Northern Mariana 

25 Islands, the Commonwealth of Puerto Rico, the VirVerDate Mar 15 2010 01:49 Mar 27, 2013 Jkt 029200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S605.IS S605

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1 gin Islands of the United States, and any other ter2 ritory or possession of the United States. 

3 SEC. 1402. CALCULATION OF AVERAGE FEED COST AND AC4 TUAL DAIRY PRODUCTION MARGINS. 

5 (a) CALCULATION OF AVERAGE FEED COST.—The 

6 Secretary shall calculate the national average feed cost for 

7 each month using the following data: 

8 (1) The price of corn for a month shall be the 

9 price received during that month by farmers in the 

10 United States for corn, as reported in the monthly 

11 Agricultural Prices report by the Secretary. 

12 (2) The price of soybean meal for a month shall 

13 be the central Illinois price for soybean meal, as re14 ported in the Market News–Monthly Soybean Meal 

15 Price Report by the Secretary. 

16 (3) The price of alfalfa hay for a month shall 

17 be the price received during that month by farmers 

18 in the United States for alfalfa hay, as reported in 

19 the monthly Agricultural Prices report by the Sec20 retary. 

21 (b) CALCULATION OF ACTUAL DAIRY PRODUCTION

22 MARGINS.— 

23 (1) PRODUCTION MARGIN PROTECTION PRO24 GRAM.—For use in the production margin protection 

25 program under subpart A, the Secretary shall calVerDate Mar 15 2010 01:49 Mar 27, 2013 Jkt 029200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S605.IS S605

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1 culate the actual dairy production margin for each 

2 consecutive 2-month period by subtracting— 

3 (A) the average feed cost for that consecu4 tive 2-month period, determined in accordance 

5 with subsection (a); from 

6 (B) the all-milk price for that consecutive 

7 2-month period. 

8 (2) STABILIZATION PROGRAM.—For use in the 

9 stabilization program under subpart B, the Sec10 retary shall calculate each month the actual dairy 

11 production margin for the preceding month by sub12 tracting— 

13 (A) the average feed cost for that pre14 ceding month, determined in accordance with 

15 subsection (a); from 

16 (B) the all-milk price for that preceding 

17 month. 

18 (3) TIME FOR CALCULATIONS.—The calcula19 tions required by paragraphs (1) and (2) shall be 

20 made as soon as practicable using the full month 

21 price of the applicable reference month. 


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1 Subpart A—Dairy Production Margin Protection 

2 Program 

3 SEC. 1411. ESTABLISHMENT OF DAIRY PRODUCTION MAR4 GIN PROTECTION PROGRAM. 

5 Effective not later than 120 days after the effective 

6 date of this subtitle, the Secretary shall establish and ad7 minister a dairy production margin protection program 

8 under which participating dairy operations are paid— 

9 (1) basic production margin protection program 

10 payments under section 1414 when actual dairy pro11 duction margins are less than the threshold levels 

12 for such payments; and 

13 (2) supplemental production margin protection 

14 program payments under section 1415 if purchased 

15 by a participating dairy operation. 

16 SEC. 1412. PARTICIPATION OF DAIRY OPERATIONS IN PRO17 DUCTION MARGIN PROTECTION PROGRAM. 

18 (a) ELIGIBILITY.—All dairy operations in the United 

19 States shall be eligible to participate in the production 

20 margin protection program, except that a participating 

21 dairy operation shall be required to register with the Sec22 retary before the participating dairy operation may re23 ceive— 

24 (1) basic production margin protection program 

25 payments under section 1414; and 


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1 (2) if the participating dairy operation pur2 chases supplemental production margin protection 

3 under section 1415, supplemental production margin 

4 protection program payments under such section. 

5 (b) REGISTRATION PROCESS.— 

6 (1) IN GENERAL.—The Secretary shall specify 

7 the manner and form by which a participating dairy 

8 operation may register to participate in the produc9 tion margin protection program. 

10 (2) TREATMENT OF MULTIPRODUCER DAIRY

11 OPERATIONS.—If a participating dairy operation is 

12 operated by more than 1 dairy producer, all of the 

13 dairy producers of the participating dairy operation 

14 shall be treated as a single dairy operation for pur15 poses of— 

16 (A) registration to receive basic production 

17 margin protection and election to purchase sup18 plemental production margin protection; 

19 (B) payment of the participation fee under 

20 subsection (d) and producer premiums under 

21 section 1415; and 

22 (C) participation in the stabilization pro23 gram under subtitle B. 

24 (3) TREATMENT OF PRODUCERS WITH MUL25 TIPLE DAIRY OPERATIONS.—If a dairy producer opVerDate Mar 15 2010 01:49 Mar 27, 2013 Jkt 029200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S605.IS S605

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1 erates 2 or more dairy operations, each dairy oper2 ation of the producer shall separately register to re3 ceive basic production margin protection and pur4 chase supplemental production margin protection 

5 and only those dairy operations so registered shall 

6 be covered by the stabilization program. 

7 (c) TIME FOR REGISTRATION.— 

8 (1) EXISTING DAIRY OPERATIONS.—During the 

9 15-month period beginning on the date of the initi10 ation of the registration period for the production 

11 margin protection program, a dairy operation that is 

12 actively engaged as of such date may register with 

13 the Secretary— 

14 (A) to receive basic production margin pro15 tection; and 

16 (B) if the dairy operation elects, to pur17 chase supplemental production margin protec18 tion. 

19 (2) NEW ENTRANTS.—A dairy producer that 

20 has no existing interest in a dairy operation as of 

21 the date of the initiation of the registration period 

22 for the production margin protection program, but 

23 that, after such date, establishes a new dairy oper24 ation, may register with the Secretary during the 1- 


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1 year period beginning on the date on which the dairy 

2 operation first markets milk commercially— 

3 (A) to receive basic production margin pro4 tection; and 

5 (B) if the dairy operation elects, to pur6 chase supplemental production margin protec7 tion. 

8 (d) TRANSITION FROM MILC TO PRODUCTION MAR9 GIN PROTECTION.— 

10 (1) DEFINITION OF TRANSITION PERIOD.—In 

11 this subsection, the term ‘‘transition period’’ means 

12 the period during which the milk income loss pro13 gram established under section 1506 of the Food, 

14 Conservation, and Energy Act of 2008 (7 U.S.C. 

15 8773) and the production margin protection pro16 gram under this subtitle are both in existence. 

17 (2) NOTICE OF AVAILABILITY.—Not later than 

18 30 days after the date of enactment of this Act, the 

19 Secretary shall publish a notice in the Federal Reg20 ister to inform dairy operations of the availability of 

21 basic production margin protection and supple22 mental production margin protection, including the 

23 terms of the protection and information about the 

24 option of dairy operations during the transition pe25 riod to make an election described in paragraph (3). 


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1 (3) ELECTION.—Except as provided in para2 graph (4), a dairy operation may elect to participate 

3 in either the milk income loss program established 

4 under section 1506 of the Food, Conservation, and 

5 Energy Act of 2008 (7 U.S.C. 8773) or the produc6 tion margin protection program under this subtitle 

7 for the duration of the transition period. 

8 (4) TRANSFER TO PRODUCTION MARGIN PRO9 TECTION.—A dairy operation that elects to partici10 pate in the milk income loss program established 

11 under section 1506 of the Food, Conservation, and 

12 Energy Act of 2008 (7 U.S.C. 8773) during the 

13 transition period may, at any time, make a perma14 nent transfer to the production margin protection 

15 program. 

16 (e) ADMINISTRATION FEE.— 

17 (1) ADMINISTRATION FEE REQUIRED.—Except 

18 as provided in paragraph (5), a participating dairy 

19 operation shall— 

20 (A) pay an administration fee under this 

21 subsection to register to participate in the pro22 duction margin protection program; and 

23 (B) pay the administration fee annually 

24 thereafter to continue to participate in the pro25 duction margin protection program. 


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1 (2) FEE AMOUNT.—The administration fee for 

2 a participating dairy operation for a calendar year 

3 shall be based on the pounds of milk (in millions) 

4 marketed by the participating dairy operation in the 

5 previous calendar year, as follows: 

Pounds Marketed (in millions) Administration Fee 

less than 1 $100

1 to 5 $250

more than 5 to 10 $350

more than 10 to 40 $1,000

more than 40 $2,500. 

6 (3) DEPOSIT OF FEES.—All administration fees 

7 collected under this subsection shall be credited to 

8 the fund or account used to cover the costs incurred 

9 to administer the production margin protection pro10 gram and the stabilization program and shall be 

11 available to the Secretary, without further appro12 priation and until expended, for use or transfer as 

13 provided in paragraph (4). 

14 (4) USE OF FEES.—The Secretary shall use ad15 ministration fees collected under this subsection— 

16 (A) to cover administrative costs of the 

17 production margin protection program and sta18 bilization program; and 

19 (B) to cover costs of the Department of 

20 Agriculture relating to reporting of dairy mar21 ket news, carrying out the amendments made 


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1 by section 1476, and carrying out section 273 

2 of the Agricultural Marketing Act of 1946 (7 

3 U.S.C. 1637b), to the extent funds remain 

4 available after operation of subparagraph (A). 

5 (5) WAIVER.—The Secretary shall waive or re6 duce the administration fee required under para7 graph (1) in the case of a limited-resource dairy op8 eration, as defined by the Secretary. 

9 (f) LIMITATION.—A dairy operation may only partici10 pate in the production margin protection program or the 

11 livestock gross margin for dairy program under the Fed12 eral Crop Insurance Act (7 U.S.C. 1501 et seq.), but not 

13 both. 

14 SEC. 1413. PRODUCTION HISTORY OF PARTICIPATING 

15 DAIRY OPERATIONS. 

16 (a) PRODUCTION HISTORY FOR BASIC PRODUCTION

17 MARGIN PROTECTION.— 

18 (1) DETERMINATION REQUIRED.—For purposes 

19 of providing basic production margin protection, the 

20 Secretary shall determine the basic production his21 tory of a participating dairy operation. 

22 (2) CALCULATION.—Except as provided in 

23 paragraph (3), the basic production history of a par24 ticipating dairy operation for basic production mar25 gin protection is equal to the highest annual milk 


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1 marketings of the participating dairy operation dur2 ing any 1 of the 3 calendar years immediately pre3 ceding the calendar year in which the participating 

4 dairy operation first signed up to participate in the 

5 production margin protection program. 

6 (3) ELECTION BY NEW DAIRY OPERATIONS.—In 

7 the case of a participating dairy operation that has 

8 been in operation for less than a year, the partici9 pating dairy operation shall elect 1 of the following 

10 methods for the Secretary to determine the basic 

11 production history of the participating dairy oper12 ation: 

13 (A) The volume of the actual milk mar14 ketings for the months the participating dairy 

15 operation has been in operation extrapolated to 

16 a yearly amount. 

17 (B) An estimate of the actual milk mar18 ketings of the participating dairy operation 

19 based on the herd size of the participating dairy 

20 operation relative to the national rolling herd 

21 average data published by the Secretary. 

22 (4) NO CHANGE IN PRODUCTION HISTORY FOR

23 BASIC PRODUCTION MARGIN PROTECTION.—Once 

24 the basic production history of a participating dairy 

25 operation is determined under paragraph (2) or (3), 


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1 the basic production history shall not be subse2 quently changed for purposes of determining the 

3 amount of any basic production margin protection 

4 payments for the participating dairy operation made 

5 under section 1414. 

6 (b) ANNUAL PRODUCTION HISTORY FOR SUPPLE7 MENTAL PRODUCTION MARGIN PROTECTION.— 

8 (1) DETERMINATION REQUIRED.—For purposes 

9 of providing supplemental production margin protec10 tion for a participating dairy operation that pur11 chases supplemental production margin protection 

12 for a year under section 1415, the Secretary shall 

13 determine the annual production history of the par14 ticipating dairy operation under paragraph (2). 

15 (2) CALCULATION.—The annual production his16 tory of a participating dairy operation for a year is 

17 equal to the actual milk marketings of the partici18 pating dairy operation during the preceding calendar 

19 year. 

20 (3) NEW DAIRY OPERATIONS.—Subsection 

21 (a)(3) shall apply with respect to determining the 

22 annual production history of a participating dairy 

23 operation that has been in operation for less than a 

24 year. 


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1 (c) REQUIRED INFORMATION.—A participating dairy 

2 operation shall provide all information that the Secretary 

3 may require in order to establish— 

4 (1) the basic production history of the partici5 pating dairy operation under subsection (a); and 

6 (2) the production history of the participating 

7 dairy operation whenever the participating dairy op8 eration purchases supplemental production margin 

9 protection under section 1415. 

10 (d) TRANSFER OF PRODUCTION HISTORIES.— 

11 (1) TRANSFER BY SALE OR LEASE.—In promul12 gating the rules to initiate the production margin 

13 protection program, the Secretary shall specify the 

14 conditions under which and the manner by which the 

15 production history of a participating dairy operation 

16 may be transferred by sale or lease. 

17 (2) COVERAGE LEVEL.— 

18 (A) BASIC PRODUCTION MARGIN PROTEC19 TION.—A purchaser or lessee to whom the Sec20 retary transfers a basic production history 

21 under this subsection shall not obtain a dif22 ferent level of basic production margin protec23 tion than the basic production margin protec24 tion coverage held by the seller or lessor from 

25 whom the transfer was obtained. 


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1 (B) SUPPLEMENTAL PRODUCTION MARGIN

2 PROTECTION.—A purchaser or lessee to whom 

3 the Secretary transfers an annual production 

4 history under this subsection shall not obtain a 

5 different level of supplemental production mar6 gin protection coverage than the supplemental 

7 production margin protection coverage in effect 

8 for the seller or lessor from whom the transfer 

9 was obtained for the calendar year in which the 

10 transfer was made. 

11 (e) MOVEMENT AND TRANSFER OF PRODUCTION

12 HISTORY.— 

13 (1) MOVEMENT AND TRANSFER AUTHOR14 IZED.—Subject to paragraph (2), if a participating 

15 dairy operation moves from one location to another 

16 location, the participating dairy operation may 

17 transfer the basic production history and annual 

18 production history associated with the participating 

19 dairy operation. 

20 (2) NOTIFICATION REQUIREMENT.—A partici21 pating dairy operation shall notify the Secretary of 

22 any move of a participating dairy operation under 

23 paragraph (1). 

24 (3) SUBSEQUENT OCCUPATION OF VACATED LO25 CATION.—A party subsequently occupying a particiVerDate Mar 15 2010 01:49 Mar 27, 2013 Jkt 029200 PO 00000 Frm 00018 Fmt 6652 Sfmt 6201 E:\BILLS\S605.IS S605

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1 pating dairy operation location vacated as described 

2 in paragraph (1) shall have no interest in the basic 

3 production history or annual production history pre4 viously associated with the participating dairy oper5 ation at such location. 

6 SEC. 1414. BASIC PRODUCTION MARGIN PROTECTION. 

7 (a) PAYMENT THRESHOLD.—The Secretary shall 

8 make a payment to participating dairy operations in ac9 cordance with subsection (b) whenever the average actual 

10 dairy production margin for a consecutive 2-month period 

11 is less than $4.00 per hundredweight of milk. 

12 (b) BASIC PRODUCTION MARGIN PROTECTION PAY13 MENT.—The basic production margin protection payment 

14 for a participating dairy operation for a consecutive 2- 

15 month period shall be equal to the product obtained by 

16 multiplying— 

17 (1) the difference between the average actual 

18 dairy production margin for the consecutive 2-month 

19 period and $4.00, except that, if the difference is 

20 more than $4.00, the Secretary shall use $4.00; by 

21 (2) the lesser of— 

22 (A) 80 percent of the production history of 

23 the participating dairy operation, divided by 6; 

24 or 


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1 (B) the actual quantity of milk marketed 

2 by the participating dairy operation during the 

3 consecutive 2-month period. 

4 SEC. 1415. SUPPLEMENTAL PRODUCTION MARGIN PROTEC5 TION. 

6 (a) ELECTION OF SUPPLEMENTAL PRODUCTION

7 MARGIN PROTECTION.—A participating dairy operation 

8 may annually purchase supplemental production margin 

9 protection to protect, during the calendar year for which 

10 purchased, a higher level of the income of a participating 

11 dairy operation than the income level guaranteed by basic 

12 production margin protection under section 1414. 

13 (b) SELECTION OF PAYMENT THRESHOLD.—A par14 ticipating dairy operation purchasing supplemental pro15 duction margin protection for a year shall elect a coverage 

16 level that is higher, in any increment of $0.50, than the 

17 payment threshold for basic production margin protection 

18 specified in section 1414(a), but not to exceed $8.00. 

19 (c) COVERAGE PERCENTAGE.—A participating dairy 

20 operation purchasing supplemental production margin 

21 protection for a year shall elect a percentage of coverage 

22 equal to not more than 90 percent, nor less than 25 per23 cent, of the annual production history of the participating 

24 dairy operation. 


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1 (d) PREMIUMS FOR SUPPLEMENTAL PRODUCTION

2 MARGIN PROTECTION.— 

3 (1) PREMIUMS REQUIRED.—A participating 

4 dairy operation that purchases supplemental produc5 tion margin protection shall pay an annual premium 

6 equal to the product obtained by multiplying— 

7 (A) the coverage percentage elected by the 

8 participating dairy operation under subsection 

9 (c); 

10 (B) the annual production history of the 

11 participating dairy operation; and 

12 (C) the premium per hundredweight of 

13 milk, as specified in the applicable table under 

14 paragraph (2) or (3). 

15 (2) PREMIUM PER HUNDREDWEIGHT FOR FIRST

16 4 MILLION POUNDS OF PRODUCTION.—For the first 

17 4,000,000 pounds of milk marketings included in 

18 the annual production history of a participating 

19 dairy operation, the premium per hundredweight 

20 corresponding to each coverage level specified in the 

21 following table is as follows: 

Coverage Level Premium per Cwt. 

$6.50 $0.00

$7.00 $0.40

$7.50 $0.60

$8.00 $0.95. 


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1 (3) PREMIUM PER HUNDREDWEIGHT FOR PRO2 DUCTION IN EXCESS OF 4 MILLION POUNDS.—For 

3 milk marketings in excess of 4,000,000 pounds in4 cluded in the annual production history of a partici5 pating dairy operation, the premium per hundred6 weight corresponding to each coverage level is as fol7 lows: 

Coverage Level Premium per Cwt. 

$4.50 $0.02

$5.00 $0.04

$5.50 $0.10

$6.00 $0.15

$6.50 $0.29

$7.00 $0.62

$7.50 $0.83

$8.00 $1.06. 

8 (4) TIME FOR PAYMENT.—In promulgating the 

9 rules to initiate the production margin protection 

10 program, the Secretary shall provide more than 1 

11 method by which a participating dairy operation that 

12 purchases supplemental production margin protec13 tion for a calendar year may pay the premium under 

14 this subsection for that year in any manner that 

15 maximizes participating dairy operation payment 

16 flexibility and program integrity. 

17 (e) PREMIUM OBLIGATIONS.— 

18 (1) PRO-RATION OF PREMIUM FOR NEW DAIRY

19 OPERATIONS.—A participating dairy operation de20 scribed in section 1412(c)(2) that purchases suppleVerDate Mar 15 2010 01:49 Mar 27, 2013 Jkt 029200 PO 00000 Frm 00022 Fmt 6652 Sfmt 6201 E:\BILLS\S605.IS S605

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1 mental production margin protection for a calendar 

2 year after the start of the calendar year shall pay 

3 a pro-rated premium for that calendar year based on 

4 the portion of the calendar year for which the par5 ticipating dairy operation purchases the coverage. 

6 (2) LEGAL OBLIGATION.—A participating dairy 

7 operation that purchases supplemental production 

8 margin protection for a calendar year shall be legally 

9 obligated to pay the applicable premium for that cal10 endar year, except that the Secretary may waive 

11 that obligation, under terms and conditions deter12 mined by the Secretary, for 1 or more producers in 

13 any participating dairy operation in the case of 

14 death, retirement, permanent dissolution of a par15 ticipating dairy operation, or other circumstances as 

16 the Secretary considers appropriate to ensure the in17 tegrity of the program. 

18 (f) SUPPLEMENTAL PAYMENT THRESHOLD.—A par19 ticipating dairy operation with supplemental production 

20 margin protection shall receive a supplemental production 

21 margin protection payment whenever the average actual 

22 dairy production margin for a consecutive 2-month period 

23 is less than the coverage level threshold selected by the 

24 participating dairy operation under subsection (b). 


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1 (g) SUPPLEMENTAL PRODUCTION MARGIN PROTEC2 TION PAYMENTS.— 

3 (1) IN GENERAL.—The supplemental produc4 tion margin protection payment for a participating 

5 dairy operation is in addition to the basic production 

6 margin protection payment. 

7 (2) AMOUNT OF PAYMENT.—The supplemental 

8 production margin protection payment for the par9 ticipating dairy operation shall be determined as fol10 lows: 

11 (A) The Secretary shall calculate the dif12 ference between the coverage level threshold se13 lected by the participating dairy operation 

14 under subsection (b) and the greater of— 

15 (i) the average actual dairy production 

16 margin for the consecutive 2-month period; 

17 or 

18 (ii) $4.00. 

19 (B) The amount determined under sub20 paragraph (A) shall be multiplied by the per21 centage selected by the participating dairy oper22 ation under subsection (c) and by the lesser of 

23 the following: 


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1 (i) The annual production history of 

2 the participating dairy operation, divided 

3 by 6. 

4 (ii) The actual amount of milk mar5 keted by the participating dairy operation 

6 during the consecutive 2-month period. 

7 SEC. 1416. EFFECT OF FAILURE TO PAY ADMINISTRATION 

8 FEES OR PREMIUMS. 

9 (a) LOSS OF BENEFITS.—A participating dairy oper10 ation that fails to pay the required administration fee 

11 under section 1412 or is in arrears on premium payments 

12 for supplemental production margin protection under sec13 tion 1415— 

14 (1) remains legally obligated to pay the admin15 istration fee or premiums, as the case may be; and 

16 (2) may not receive basic production margin 

17 protection payments or supplemental production 

18 margin protection payments until the fees or pre19 miums are fully paid. 

20 (b) ENFORCEMENT.—The Secretary may take such 

21 action as necessary to collect administration fees and pre22 mium payments for supplemental production margin pro23 tection. 


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1 Subpart B—Dairy Market Stabilization Program 

2 SEC. 1431. ESTABLISHMENT OF DAIRY MARKET STABILIZA3 TION PROGRAM. 

4 (a) PROGRAM REQUIRED; PURPOSE.—Effective not 

5 later than 120 days after the effective date of this subtitle, 

6 the Secretary shall establish and administer a dairy mar7 ket stabilization program applicable to participating dairy 

8 operations for the purpose of assisting in balancing the 

9 supply of milk with demand when participating dairy oper10 ations are experiencing low or negative operating margins. 

11 (b) ELECTION OF STABILIZATION PROGRAM BASE

12 CALCULATION METHOD.— 

13 (1) ELECTION.—When a dairy operation signs 

14 up under section 1412 to participate in the produc15 tion margin protection program, the dairy operation 

16 shall inform the Secretary of the method by which 

17 the stabilization program base for the participating 

18 dairy operation will be calculated under paragraph 

19 (3). 

20 (2) CHANGE IN CALCULATION METHOD.—A 

21 participating dairy operation may change the sta22 bilization program base calculation method to be 

23 used for a calendar year by notifying the Secretary 

24 of the change not later than a date determined by 

25 the Secretary. 


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1 (3) CALCULATION METHODS.—A participating 

2 dairy operation may elect either of the following 

3 methods for calculation of the stabilization program 

4 base for the participating dairy operation: 

5 (A) The volume of the average monthly 

6 milk marketings of the participating dairy oper7 ation for the 3 months immediately preceding 

8 the announcement by the Secretary that the 

9 stabilization program will become effective. 

10 (B) The volume of the monthly milk mar11 ketings of the participating dairy operation for 

12 the same month in the preceding year as the 

13 month for which the Secretary has announced 

14 the stabilization program will become effective. 

15 (4) EXEMPTION.—The stabilization program 

16 base for a participating dairy producer shall not in17 clude the first 4,000,000 pounds of production of 

18 the participating dairy producer per calendar year, 

19 as determined by the Secretary. 

20 SEC. 1432. THRESHOLD FOR IMPLEMENTATION AND RE21 DUCTION IN DAIRY PAYMENTS. 

22 (a) WHEN STABILIZATION PROGRAM REQUIRED.— 

23 Except as provided in subsection (b), the Secretary shall 

24 announce that the stabilization program is in effect and 

25 order reduced payments by handlers to participating dairy 


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1 operations that exceed the applicable percentage of the 

2 participating dairy operation’s stabilization program base 

3 whenever— 

4 (1) the actual dairy production margin has been 

5 $6.00 or less per hundredweight of milk for each of 

6 the immediately preceding 2 months; or 

7 (2) the actual dairy production margin has been 

8 $4.00 or less per hundredweight of milk for the im9 mediately preceding month. 

10 (b) EXCEPTION.—If any of the conditions described 

11 in section 1436(b) have been met during the 2-month pe12 riod immediately preceding the month in which the an13 nouncement under subsection (a) would otherwise be made 

14 by the Secretary in the absence of this exception, the Sec15 retary shall— 

16 (1) suspend the stabilization program; 

17 (2) refrain from making the announcement 

18 under subsection (a) to implement order the sta19 bilization payment; or 

20 (3) order reduced payments. 

21 (c) EFFECTIVE DATE FOR IMPLEMENTATION OF

22 PAYMENT REDUCTIONS.—Reductions in dairy payments 

23 shall commence beginning on the first day of the month 

24 immediately following the date of the announcement by 

25 the Secretary under subsection (a). 


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1 SEC. 1433. MILK MARKETINGS INFORMATION. 

2 (a) COLLECTION OF MILK MARKETING DATA.—The 

3 Secretary shall establish, by regulation, a process to collect 

4 from participating dairy operations and handlers such in5 formation that the Secretary considers necessary for each 

6 month during which the stabilization program is in effect. 

7 (b) REDUCE REGULATORY BURDEN.—When imple8 menting the process under subsection (a), the Secretary 

9 shall minimize the regulatory burden on participating 

10 dairy operations and handlers. 

11 SEC. 1434. CALCULATION AND COLLECTION OF REDUCED 

12 DAIRY OPERATION PAYMENTS. 

13 (a) REDUCED PARTICIPATING DAIRY OPERATION

14 PAYMENTS REQUIRED.—During any month in which pay15 ment reductions are in effect under the stabilization pro16 gram, each handler shall reduce payments to each partici17 pating dairy operation from whom the handler receives 

18 milk. 

19 (b) REDUCTIONS BASED ON ACTUAL DAIRY PRO20 DUCTION MARGIN.— 

21 (1) REDUCTION REQUIREMENT 1.—If the Sec22 retary determines that the average actual dairy pro23 duction margin has been less than $6.00 but greater 

24 than $5.00 per hundredweight of milk for 2 consecu25 tive months, the handler shall make payments to a 


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1 participating dairy operation for a month based on 

2 the greater of the following: 

3 (A) 98 percent of the stabilization program 

4 base of the participating dairy operation. 

5 (B) 94 percent of the marketings of milk 

6 for the month by the participating dairy oper7 ation. 

8 (2) REDUCTION REQUIREMENT 2.—If the Sec9 retary determines that the average actual dairy pro10 duction margin has been less than $5.00 but greater 

11 than $4.00 for 2 consecutive months, the handler 

12 shall make payments to a participating dairy oper13 ation for a month based on the greater of the fol14 lowing: 

15 (A) 97 percent of the stabilization program 

16 base of the participating dairy operation. 

17 (B) 93 percent of the marketings of milk 

18 for the month by the participating dairy oper19 ation. 

20 (3) REDUCTION REQUIREMENT 3.—If the Sec21 retary determines that the average actual dairy pro22 duction margin has been $4.00 or less for any 1 

23 month, the handler shall make payments to a par24 ticipating dairy operation for a month based on the 

25 greater of the following: 


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1 (A) 96 percent of the stabilization program 

2 base of the participating dairy operation. 

3 (B) 92 percent of the marketings of milk 

4 for the month by the participating dairy oper5 ation. 

6 (c) CONTINUATION OF REDUCTIONS.—The largest 

7 level of payment reduction required under paragraph (1), 

8 (2), or (3) of subsection (b) shall be continued for each 

9 month until the Secretary suspends the stabilization pro10 gram and terminates payment reductions in accordance 

11 with section 1436. 

12 (d) PAYMENT REDUCTION EXCEPTION.—Notwith13 standing any preceding subsection of this section, a han14 dler shall make no payment reductions for a participating 

15 dairy operation for a month if the participating dairy oper16 ation’s milk marketings for the month are equal to or less 

17 than the percentage of the stabilization program base ap18 plicable to the participating dairy operation under para19 graph (1), (2), or (3) of subsection (b). 

20 SEC. 1435. REMITTING FUNDS TO THE SECRETARY AND USE 

21 OF FUNDS. 

22 (a) REMITTING FUNDS.—As soon as practicable after 

23 the end of each month during which payment reductions 

24 are in effect under the stabilization program, each handler 

25 shall remit to the Secretary an amount equal to the 


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1 amount by which payments to participating dairy oper2 ations are reduced by the handler under section 1434. 

3 (b) DEPOSIT OF REMITTED FUNDS.—All funds re4 ceived under subsection (a) shall be available to the Sec5 retary, without further appropriation and until expended, 

6 for use or transfer as provided in subsection (c). 

7 (c) USE OF FUNDS.— 

8 (1) AVAILABILITY FOR CERTAIN COMMODITY

9 DONATIONS.—Not later than 90 days after the 

10 funds described in subsection (a) are due as deter11 mined by the Secretary, the Secretary shall obligate 

12 the funds for the purpose of— 

13 (A) purchasing dairy products for donation 

14 to food banks and other programs that the Sec15 retary determines appropriate; and 

16 (B) expanding consumption and building 

17 demand for dairy products. 

18 (2) NO DUPLICATION OF EFFORT.—The Sec19 retary shall ensure that expenditures under para20 graph (1) are compatible with, and do not duplicate, 

21 programs supported by the dairy research and pro22 motion activities conducted under the Dairy Produc23 tion Stabilization Act of 1983 (7 U.S.C. 4501 et 

24 seq.). 


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1 (3) ACCOUNTING.—The Secretary shall keep an 

2 accurate account of all funds expended under para3 graph (1). 

4 (d) ANNUAL REPORT.—Not later than December 31 

5 of each year that the stabilization program is in effect, 

6 the Secretary shall submit to the Committee on Agri7 culture of the House of Representatives and the Com8 mittee on Agriculture, Nutrition, and Forestry of the Sen9 ate a report that provides an accurate accounting of— 

10 (1) the funds received by the Secretary during 

11 the preceding fiscal year under subsection (a); 

12 (2) all expenditures made by the Secretary 

13 under subsection (b) during the preceding fiscal 

14 year; and 

15 (3) the impact of the stabilization program on 

16 dairy markets. 

17 (e) ENFORCEMENT.—If a participating dairy oper18 ation or handler fails to remit or collect the amounts by 

19 which payments to participating dairy operations are re20 duced under section 1434, the participating dairy oper21 ation or handler responsible for the failure shall be liable 

22 to the Secretary for the amount that should have been 

23 remitted or collected, plus interest. In addition to the en24 forcement authorities available under section 1437, the 


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1 Secretary may enforce this subsection in the courts of the 

2 United States. 

3 SEC. 1436. SUSPENSION OF REDUCED PAYMENT REQUIRE4 MENT. 

5 (a) DETERMINATION OF PRICES.—For purposes of 

6 this section: 

7 (1) The price in the United States for cheddar 

8 cheese and nonfat dry milk shall be determined by 

9 the Secretary. 

10 (2) The world price of cheddar cheese and skim 

11 milk powder shall be determined by the Secretary. 

12 (b) SUSPENSION THRESHOLDS.—The stabilization 

13 program shall be suspended or the Secretary shall refrain 

14 from making the announcement under section 1432(a) if 

15 the Secretary determines that— 

16 (1) the actual dairy production margin is great17 er than $6.00 per hundredweight of milk for 2 con18 secutive months; 

19 (2) the actual dairy production margin is equal 

20 to or less than $6.00 (but greater than $5.00) for 

21 2 consecutive months, and during the same 2 con22 secutive months— 

23 (A) the price in the United States for 

24 cheddar cheese is equal to or greater than the 

25 world price of cheddar cheese; or 


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1 (B) the price in the United States for non2 fat dry milk is equal to or greater than the 

3 world price of skim milk powder; 

4 (3) the actual dairy production margin is equal 

5 to or less than $5.00 (but greater than $4.00) for 

6 2 consecutive months, and during the same 2 con7 secutive months— 

8 (A) the price in the United States for 

9 cheddar cheese is more than 5 percent above 

10 the world price of cheddar cheese; or 

11 (B) the price in the United States for non12 fat dry milk is more than 5 percent above the 

13 world price of skim milk powder; or 

14 (4) the actual dairy production margin is equal 

15 to or less than $4.00 for 2 consecutive months, and 

16 during the same 2 consecutive months— 

17 (A) the price in the United States for 

18 cheddar cheese is more than 7 percent above 

19 the world price of cheddar cheese; or 

20 (B) the price in the United States for non21 fat dry milk is more than 7 percent above the 

22 world price of skim milk powder. 

23 (c) IMPLEMENTATION BY HANDLERS.—Effective on 

24 the day after the date of the announcement by the Sec25 retary under subsection (b) of the suspension of the staVerDate Mar 15 2010 01:49 Mar 27, 2013 Jkt 029200 PO 00000 Frm 00035 Fmt 6652 Sfmt 6201 E:\BILLS\S605.IS S605

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1 bilization program, the handler shall cease reducing pay2 ments to participating dairy operations under the sta3 bilization program. 

4 (d) CONDITION ON RESUMPTION OF STABILIZATION

5 PROGRAM.—Upon the announcement by the Secretary 

6 under subsection (b) that the stabilization program has 

7 been suspended, the stabilization program may not be im8 plemented again until, at the earliest— 

9 (1) 2 months have passed, beginning on the 

10 first day of the month immediately following the an11 nouncement by the Secretary; and 

12 (2) the conditions of section 1432(a) are again 

13 met. 

14 SEC. 1437. ENFORCEMENT. 

15 (a) UNLAWFUL ACT.—It shall be unlawful and a vio16 lation of the this subpart for any person subject to the 

17 stabilization program to willfully fail or refuse to provide, 

18 or delay the timely reporting of, accurate information and 

19 remittance of funds to the Secretary in accordance with 

20 this subpart. 

21 (b) ORDER.—After providing notice and opportunity 

22 for a hearing to an affected person, the Secretary may 

23 issue an order against any person to cease and desist from 

24 continuing any violation of this subpart. 


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1 (c) APPEAL.—An order of the Secretary under sub2 section (b) shall be final and conclusive unless an affected 

3 person files an appeal of the order of the Secretary in 

4 United States district court not later than 30 days after 

5 the date of the issuance of the order. A finding of the 

6 Secretary in the order shall be set aside only if the finding 

7 is not supported by substantial evidence. 

8 (d) NONCOMPLIANCE WITH ORDER.—If a person 

9 subject to this subpart fails to obey an order issued under 

10 subsection (b) after the order has become final and 

11 unappealable, or after the appropriate United States dis12 trict court has entered a final judgment in favor of the 

13 Secretary, the United States may apply to the appropriate 

14 United States district court for enforcement of the order. 

15 If the court determines that the order was lawfully made 

16 and duly served and that the person violated the order, 

17 the court shall enforce the order. 

18 SEC. 1438. AUDIT REQUIREMENTS. 

19 (a) AUDITS OF DAIRY OPERATION AND HANDLER

20 COMPLIANCE.— 

21 (1) AUDITS AUTHORIZED.—If determined by 

22 the Secretary to be necessary to ensure compliance 

23 by participating dairy operations and handlers with 

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1 duct periodic audits of participating dairy operations 

2 and handlers. 

3 (2) SAMPLE OF DAIRY OPERATIONS.—Any 

4 audit conducted under this subsection shall include, 

5 at a minimum, investigation of a statistically valid 

6 and random sample of participating dairy oper7 ations. 

8 (b) SUBMISSION OF RESULTS.—The Secretary shall 

9 submit the results of any audit conducted under sub10 section (a) to the Committee on Agriculture of the House 

11 of Representatives and the Committee on Agriculture, Nu12 trition, and Forestry of the Senate and include such rec13 ommendations as the Secretary considers appropriate re14 garding the stabilization program. 

15 SEC. 1439. STUDY; REPORT. 

16 (a) IN GENERAL.—The Secretary shall direct the Of17 fice of the Chief Economist to conduct a study of the im18 pacts of the program established under section 1431(a). 

19 (b) CONSIDERATIONS.—The study conducted under 

20 subsection (a) shall consider— 

21 (1) the economic impact of the program 

22 throughout the dairy product value chain, including 

23 the impact on producers, processors, domestic cus24 tomers, export customers, actual market growth and 


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1 potential market growth, farms of different sizes, 

2 and different regions and States; and 

3 (2) the impact of the program on the competi4 tiveness of the United States dairy industry in inter5 national markets. 

6 (c) REPORT.—Not later than December 1, 2016, the 

7 Office of the Chief Economist shall submit to the Com8 mittee on Agriculture of the House of Representatives and 

9 the Committee on Agriculture, Nutrition, and Forestry of 

10 the Senate a report that describes the results of the study 

11 conducted under subsection (a). 

12 Subpart C—Administration 

13 SEC. 1451. DURATION. 

14 The production margin protection program and the 

15 stabilization program shall end on December 31, 2017. 

16 SEC. 1452. ADMINISTRATION AND ENFORCEMENT. 

17 (a) IN GENERAL.—The Secretary shall promulgate 

18 regulations to address administrative and enforcement 

19 issues involved in carrying out the production margin pro20 tection, supplemental production margin protection, and 

21 market stabilization programs. 

22 (b) RECONSTITUTION AND ELIGIBILITY ISSUES.— 

23 (1) RECONSTITUTION.—Using authorities under 

24 section 1001(f) and 1001B of the Food Security Act 

25 of 1985 (7 U.S.C. 1308(f), 1308–2), the Secretary 


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1 shall promulgate regulations to prohibit a dairy pro2 ducer from reconstituting a dairy operation for the 

3 sole purpose of the dairy producer— 

4 (A) receiving basic margin protection; 

5 (B) purchasing supplemental margin pro6 tection; or 

7 (C) avoiding participation in the market 

8 stabilization program. 

9 (2) ELIGIBILITY ISSUES.—Using authorities 

10 under section 1001(f) and 1001B of the Food Secu11 rity Act of 1985 (7 U.S.C. 1308(f), 1308–2), the 

12 Secretary shall promulgate regulations— 

13 (A) to prohibit a scheme or device; 

14 (B) to provide for equitable relief; and 

15 (C) to provide for other issues affecting eli16 gibility and liability issues. 

17 (3) ADMINISTRATIVE APPEALS.—Using authori18 ties under section 1001(h) of the Food Security Act 

19 of 1985 (7 U.S.C. 1308(h)) and subtitle H of the 

20 Department of Agriculture Reorganization Act (7 

21 U.S.C. 6991 et seq.), the Secretary shall promulgate 

22 regulations to provide for administrative appeals of 

23 decisions of the Secretary that are adverse to par24 ticipants of the programs described in subsection 

25 (a). 


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1 PART II—DAIRY MARKET TRANSPARENCY 

2 SEC. 1461. DAIRY PRODUCT MANDATORY REPORTING. 

3 (a) DEFINITIONS.—Section 272(1)(A) of the Agricul4 tural Marketing Act of 1946 (7 U.S.C. 1637a(1)(A)) is 

5 amended by inserting ‘‘, or any other products that may 

6 significantly aid price discovery in the dairy markets, as 

7 determined by the Secretary’’ after ‘‘of 1937’’. 

8 (b) MANDATORY REPORTING FOR DAIRY PROD9 UCTS.—Section 273(b) of the Agricultural Marketing Act 

10 of 1946 (7 U.S.C. 1637b(b)) is amended— 

11 (1) by striking paragraph (1) and inserting the 

12 following new paragraph: 

13 ‘‘(1) IN GENERAL.—In establishing the pro14 gram, the Secretary shall only— 

15 ‘‘(A)(i) subject to the conditions described 

16 in paragraph (2), require each manufacturer to 

17 report to the Secretary, more frequently than 

18 once per month, information concerning the 

19 price, quantity, and moisture content of dairy 

20 products sold by the manufacturer and any 

21 other product characteristics that may signifi22 cantly aid price discovery in the dairy markets, 

23 as determined by the Secretary; and 

24 ‘‘(ii) modify the format used to provide the 

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1 mation can be readily understood by market 

2 participants; and 

3 ‘‘(B) require each manufacturer and other 

4 person storing dairy products (including dairy 

5 products in cold storage) to report to the Sec6 retary, more frequently than once per month, 

7 information on the quantity of dairy products 

8 stored.’’; and 

9 (2) in paragraph (2), by inserting ‘‘or those 

10 that may significantly aid price discovery in the 

11 dairy markets’’ after ‘‘Federal milk marketing 

12 order’’ each place it appears in subparagraphs (A), 

13 (B), and (C). 

14 SEC. 1462. FEDERAL MILK MARKETING ORDER INFORMA15 TION. 

16 (a) INFORMATION CLEARINGHOUSE.— 

17 (1) IN GENERAL.—The Secretary shall, on be18 half of each milk marketing order issued under the 

19 Agricultural Adjustment Act (7 U.S.C. 601 et seq.), 

20 reenacted with amendments by the Agricultural 

21 Marketing Agreement Act of 1937, establish an in22 formation clearinghouse for the purposes of edu23 cating the public about the Federal milk marketing 

24 order system and any marketing order referenda, in25 cluding proposal information and timelines that shall 


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1 be kept current and updated as information becomes 

2 available. 

3 (2) REQUIREMENTS.—Information under para4 graph (1) shall include— 

5 (A) information on procedures by which 

6 cooperatives vote; 

7 (B) if applicable, information on the man8 ner by which producers may cast an individual 

9 ballot; 

10 (C) in applicable, instructions on the man11 ner in which to vote online; 

12 (D) due dates for each specific referendum; 

13 (E) the text of each referendum question 

14 under consideration; 

15 (F) a description in plain language of the 

16 question; 

17 (G) any relevant background information 

18 to the question; and 

19 (H) any other information that increases 

20 Federal milk marketing order transparency. 

21 (b) NOTIFICATION LIST FOR UPCOMING REF22 ERENDUM.—Each Federal milk marketing order shall— 

23 (1) make available the information described in 

24 subsection (b) through an Internet site; and 


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1 (2) publicize the information in major agri2 culture and dairy-specific publications on upcoming 

3 referenda. 

4 (c) STUDY.— 

5 (1) IN GENERAL.—The Secretary shall conduct 

6 a study of the feasibility of establishing 2 classes of 

7 milk, a fluid class and a manufacturing class, to re8 place the 4-class system in effect on the date of en9 actment of this Act in administering Federal milk 

10 marketing orders. 

11 (2) FEDERAL MILK MARKET ORDER REVIEW

12 COMMISSION.—The Secretary may elect to use the 

13 Federal Milk Market Order Review Commission es14 tablished under section 1509(a) of the Food, Con15 servation, and Energy Act of 2008 (Public Law 

16 110–246; 122 Stat. 1726), or documents of the 

17 Commission, to conduct all or part of the study. 

18 (3) REPORT.—Not later than 180 days after 

19 the date of enactment of this Act, the Secretary 

20 shall submit to the Committee on Agriculture of the 

21 House of Representatives and the Committee on Ag22 riculture, Nutrition, and Forestry of the Senate a 

23 report that describes the results of the study re24 quired under this subsection, including any rec25 ommendations. 


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1 PART III—REPEAL OR REAUTHORIZATION OF 

2 OTHER DAIRY-RELATED PROVISIONS 

3 SEC. 1471. REPEAL OF DAIRY PRODUCT PRICE SUPPORT 

4 AND MILK INCOME LOSS CONTRACT PRO5 GRAMS. 

6 (a) REPEAL OF DAIRY PRODUCT PRICE SUPPORT

7 PROGRAM.—Section 1501 of the Food, Conservation, and 

8 Energy Act of 2008 (7 U.S.C. 8771) is repealed. 

9 (b) REPEAL OF MILK INCOME LOSS CONTRACT PRO10 GRAM.— 

11 (1) PAYMENTS UNDER MILK INCOME LOSS CON12 TRACT PROGRAM.—Section 1506(c) of the Food, 

13 Conservation, and Energy Act of 2008 (7 U.S.C. 

14 8773(c)) is amended— 

15 (A) in paragraph (2)(A), by striking 

16 ‘‘$16.94’’ and inserting ‘‘$18.85’’; and 

17 (B) in paragraph (3)— 

18 (i) in subparagraph (A), by inserting 

19 ‘‘and’’ after the semicolon; 

20 (ii) in subparagraph (B), by striking 

21 ‘‘August 31, 2013, 45 percent; and’’ and 

22 inserting ‘‘on the date that is 270 days 

23 after the date of enactment of the Dairy 

24 Income Fairness Act of 2013, 45 per25 cent.’’; and 

26 (iii) by striking subparagraph (C). 


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1 (2) EXTENSION.—Section 1506(h)(1) of the 

2 Food, Conservation, and Energy Act of 2008 (7 

3 U.S.C. 8773(h)(1)) is amended by striking ‘‘Sep4 tember 30, 2013’’ and inserting ‘‘the date that is 

5 270 days after the date of enactment of the Dairy 

6 Income Fairness Act of 2013’’. 

7 (3) REPEAL.—Effective on the date that is 271 

8 days after the date of enactment of the Dairy In9 come Fairness Act of 2013, section 1506 of the 

10 Food, Conservation, and Energy Act of 2008 (7 

11 U.S.C. 8773) is repealed. 

12 SEC. 1472. REPEAL OF DAIRY EXPORT INCENTIVE PRO13 GRAM. 

14 (a) REPEAL.—Section 153 of the Food Security Act 

15 of 1985 (15 U.S.C. 713a–14) is repealed. 

16 (b) CONFORMING AMENDMENTS.—Section 902(2) of 

17 the Trade Sanctions Reform and Export Enhancement 

18 Act of 2000 (22 U.S.C. 7201(2)) is amended— 

19 (1) by striking subparagraph (D); and 

20 (2) by redesignating subparagraphs (E) and 

21 (F) as subparagraphs (D) and (E), respectively. 

22 SEC. 1473. EXTENSION OF DAIRY FORWARD PRICING PRO23 GRAM. 

24 Section 1502(e) of the Food, Conservation, and En25 ergy Act of 2008 (7 U.S.C. 8772(e)) is amended— 


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1 (1) in paragraph (1), by striking ‘‘2012’’ and 

2 inserting ‘‘2017’’; and 

3 (2) in paragraph (2), by striking ‘‘2015’’ and 

4 inserting ‘‘2020’’. 

5 SEC. 1474. EXTENSION OF DAIRY INDEMNITY PROGRAM. 

6 Section 3 of Public Law 90–484 (7 U.S.C. 450l) is 

7 amended by striking ‘‘2012’’ and inserting ‘‘2017’’. 

8 SEC. 1475. EXTENSION OF DAIRY PROMOTION AND RE9 SEARCH PROGRAM. 

10 Section 113(e)(2) of the Dairy Production Stabiliza11 tion Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by 

12 striking ‘‘2012’’ and inserting ‘‘2017’’. 

13 SEC. 1476. EXTENSION OF FEDERAL MILK MARKETING 

14 ORDER REVIEW COMMISSION. 

15 Section 1509(a) of the Food, Conservation, and En16 ergy Act of 2008 (Public Law 110–246; 122 Stat. 1726) 

17 is amended by inserting ‘‘or other funds’’ after ‘‘Subject 

18 to the availability of appropriations’’. 

19 PART IV—FEDERAL MILK MARKETING ORDER 

20 REFORM 

21 SEC. 1481. FEDERAL MILK MARKETING ORDER PROGRAM 

22 PRE-HEARING PROCEDURE FOR CLASS III 

23 PRICING. 

24 (a) IN GENERAL.—The Secretary shall use the pre25 hearing procedure described in this section to determine 


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1 to conduct a hearing to consider alternative formulas for 

2 Class III milk product pricing under section 8c of the Ag3 ricultural Adjustment Act (7 U.S.C. 608c), reenacted with 

4 amendments by the Agricultural Marketing Agreement 

5 Act of 1937. 

6 (b) REQUESTS FOR PROPOSALS.— 

7 (1) IN GENERAL.—Not later than 60 days after 

8 the date of enactment of this Act, the Secretary 

9 shall issue a request for the submission by interested 

10 persons of preliminary proposals for replacement of 

11 the Class III milk product pricing formula. 

12 (2) PRELIMINARY PROPOSALS.—Preliminary 

13 proposals submitted under paragraph (1)— 

14 (A) may include competitive pay price for15 mulas; and 

16 (B) shall provide sufficient detail in con17 cept to serve as the basis for the convening by 

18 the Secretary of a public information session 

19 for review and discussion in accordance with 

20 section 900.24 of title 7, Code of Federal Regu21 lations (as in effect on the date of enactment of 

22 this Act), but need not conform with the other 

23 procedural requirements of part 900 of title 7, 

24 Code of Federal Regulations (as in effect on the 

25 date of enactment of this Act). 


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1 (c) PRE-HEARING INFORMATION SESSION RE2 VIEW.— 

3 (1) IN GENERAL.—Not later than 180 days 

4 after the date of enactment of this Act, the Sec5 retary shall convene a public information session 

6 under section 900.24 of title 7, Code of Federal 

7 Regulations (as in effect on the date of enactment 

8 of this Act). 

9 (2) REQUIREMENTS.—The Secretary shall re10 view all preliminary proposals submitted under this 

11 section that are of sufficient conceptual detail to 

12 allow for the review described in paragraph (1). 

13 (d) HEARING DETERMINATION.— 

14 (1) IN GENERAL.—Not later than 90 days after 

15 the conduct of the public information session under 

16 subsection (c), the Secretary shall determine whether 

17 to conduct a formal hearing in accordance with part 

18 900 of title 7, Code of Federal Regulations (as in ef19 fect on the date of enactment of this Act). 

20 (2) HEARING TO BE CONDUCTED.—If the Sec21 retary determines under paragraph (1) to conduct a 

22 formal hearing, the Secretary shall issue notice and 

23 conduct the hearing in accordance with part 900 of 

24 title 7, Code of Federal Regulations (as in effect on 

25 the date of enactment of this Act). 


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1 (3) HEARING NOT TO BE CONDUCTED.—If the 

2 Secretary determines under paragraph (1) not to 

3 conduct a formal hearing, not later than 90 days 

4 after that determination, the Secretary shall submit 

5 to the Committee on Agriculture of the House of 

6 Representatives and the Committee on Agriculture, 

7 Nutrition and Forestry of the Senate a written re8 port that explains the basis for the decision. 

9 (e) PROCEEDING WITH A HEARING AT ANY TIME.— 

10 Consistent with the purposes of this section, the Secretary 

11 may dispense with the pre-hearing requirements of this 

12 section and initiate at any time a formal hearing under 

13 part 900 of title 7, Code of Federal Regulations (as in 

14 effect on the date of enactment of this Act). 

15 SEC. 1482. FEDERAL MILK MARKETING ORDERS. 

16 Not later than 180 days after the date of enactment 

17 of this Act, the Secretary shall conduct hearings— 

18 (1) to analyze the implications of transitioning 

19 from a 4-class system for milk products to a 2-class 

20 system; 

21 (2) to explore methods to improve signals for 

22 price discovery in the short- and long-term to allow 

23 dairy producers to better use risk management tools; 

24 and 


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1 (3) to assess whether a 2-class competitive pay 

2 pricing system for milk products would be more or 

3 less transparent than the system in effect as of the 

4 day before the date of enactment of this Act. 

5 PART V—EFFECTIVE DATE 

6 SEC. 1491. EFFECTIVE DATE. 

7 Except as otherwise provided in this subtitle, this 

8 subtitle and the amendments made by this subtitle take 

9 effect on October 1, 2012. 

Æ 


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