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Subtitle D—Dairy
SEC. 1601. DAIRY PRODUCT PRICE SUPPORT PROGRAM.
(a) SUPPORT ACTIVITIES.—During the period begin-
ning on January 1, 2008, and ending on December 31,
2012, the Secretary shall support the price of cheddar
cheese, butter, and nonfat dry milk through the purchase
of such products made from milk produced in the United
States.
(b) PURCHASE PRICE.—To carry out subsection (a),
the Secretary shall purchase cheddar cheese, butter, and
nonfat dry milk at prices that are equivalent to—
(1) in the case of cheddar cheese—
(A) in blocks, not less than $1.13 per
pound;
(B) in barrels, not less than $1.10 per
pound;
(2) in the case of butter, not less than $1.05 per
pound; and
(3) in the case of nonfat dry milk, not less than
$0.80 per pound.
(c) UNIFORM PURCHASE PRICE.—The prices that the
Secretary pays for cheese, butter, or nonfat dry milk under
this section shall be uniform for all regions of the United
States.
(d) SALES FROM INVENTORIES.—
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(1) IN GENERAL.—Except as provided in para-
graph (2), in the case of each commodity specified in
subsection (b) that is available for unrestricted use in
inventories of the Commodity Credit Corporation, the
Secretary may sell the commodity at the market
prices prevailing for that commodity at the time of
sale.
(2) MINIMUM AMOUNT.—The sale price described
in paragraph (1) may not be less than 110 percent
of the minimum purchase price specified in subsection
(b) for that commodity.
SEC. 1602. NATIONAL DAIRY MARKET LOSS PAYMENTS.
(a) DEFINITIONS.—In this section:
(1) CLASS I MILK.—The term ‘‘Class I milk’’
means milk (including milk components) classified as
Class I milk under a Federal milk marketing order.
(2) ELIGIBLE PRODUCTION.—The term ‘‘eligible
production’’ means milk produced by a producer in
a participating State.
(3) FEDERAL
MILK
MARKETING
ORDER.—The
term ‘‘Federal milk marketing order’’ means an order
issued under section 8c of the Agricultural Adjust-
ment Act (7 U.S.C. 608c), reenacted with amend-
ments by the Agricultural Marketing Agreement Act
of 1937.
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(4) PARTICIPATING STATE.—The term ‘‘partici-
pating State’’ means each State.
(5) PRODUCER.—The term ‘‘producer’’ means an
individual or entity that directly or indirectly (as de-
termined by the Secretary)—
(A) shares in the risk of producing milk;
and
(B) makes contributions (including land,
labor, management, equipment, or capital) to the
dairy farming operation of the individual or en-
tity that are at least commensurate with the
share of the individual or entity of the proceeds
of the operation.
(b) PAYMENTS.—The Secretary shall offer to enter into
contracts with producers on a dairy farm located in a par-
ticipating State under which the producers receive pay-
ments on eligible production.
(c) AMOUNT.—Payments to a producer under this sec-
tion shall be calculated by multiplying (as determined by
the Secretary)—
(1) the payment quantity for the producer dur-
ing the applicable month established under subsection
(d);
(2) the amount equal to—
(A) $16.94 per hundredweight; less
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(B) the Class I milk price per hundred-
weight in Boston under the applicable Federal
milk marketing order; by
(3)(A) for the period beginning October 1, 2007,
and ending September 30, 2008, 34 percent;
(B) for the period beginning October 1, 2008,
and ending August 31, 2012, 45 percent; and
(C) for the period beginning September 1, 2012,
and thereafter, 34 percent.
(d) PAYMENT QUANTITY.—
(1) IN GENERAL.—Subject to paragraph (2), the
payment quantity for a producer during the applica-
ble month under this section shall be equal to the
quantity of eligible production marketed by the pro-
ducer during the month.
(2) LIMITATION.—
(A) IN GENERAL.—The payment quantity
for all producers on a single dairy operation for
which the producers receive payments under sub-
section (b) shall not exceed—
(i) for the period beginning October 1,
2007, and ending September 30, 2008,
2,400,000 pounds;
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(ii) for the period beginning October 1,
2008, 
and 
ending 
August 
31, 
2012,
4,150,000 pounds; and
(iii) effective beginning September 1,
2012, 2,400,000 pounds.
(B) STANDARDS.—For purposes of deter-
mining whether producers are producers on sepa-
rate dairy operations or a single dairy oper-
ation, the Secretary shall apply the same stand-
ards as were applied in implementing the dairy
program under section 805 of the Agriculture,
Rural Development, Food and Drug Administra-
tion, and Related Agencies Appropriations Act,
2001 (as enacted into law by Public Law 106–
387; 114 Stat. 1549A–50).
(3) RECONSTITUTION.—The Secretary shall en-
sure that a producer does not reconstitute a dairy op-
eration for the sole purpose of receiving additional
payments under this section.
(e) PAYMENTS.—A payment under a contract under
this section shall be made on a monthly basis not later than
60 days after the last day of the month for which the pay-
ment is made.
(f) SIGNUP.—The Secretary shall offer to enter into
contracts under this section during the period beginning on
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the date that is 90 days after the date of enactment of this
Act and ending on September 30, 2012.
(g) DURATION OF CONTRACT.—
(1) IN GENERAL.—Except as provided in para-
graph (2), any contract entered into by producers on
a dairy farm under this section shall cover eligible
production marketed by the producers on the dairy
farm during the period starting with the first day of
month the producers on the dairy farm enter into the
contract and ending on September 30, 2012.
(2) VIOLATIONS.—If a producer violates the con-
tract, the Secretary may—
(A) terminate the contract and allow the
producer to retain any payments received under
the contract; or
(B) allow the contract to remain in effect
and require the producer to repay a portion of
the payments received under the contract based
on the severity of the violation.
SEC. 1603. DAIRY EXPORT INCENTIVE AND DAIRY INDEM-
NITY PROGRAMS.
(a) DAIRY EXPORT INCENTIVE PROGRAM.—Section
153(a) of the Food Security Act of 1985 (15 U.S.C. 713a–
14(a)) is amended by striking ‘‘2007’’ and inserting
‘‘2012’’.
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(b) DAIRY INDEMNITY PROGRAM.—Section 3 of Public
Law 90–484 (7 U.S.C. 450l) is amended by striking ‘‘2007’’
and inserting ‘‘2012’’.
SEC. 1604. FUNDING OF DAIRY PROMOTION AND RESEARCH
PROGRAM.
Section 113(e)(2) of the Dairy Production Stabiliza-
tion Act of 1983 (7 U.S.C. 4504(e)(2)) is amended by strik-
ing ‘‘2007’’ and inserting ‘‘2012’’.
SEC. 1605. REVISION OF FEDERAL MARKETING ORDER
AMENDMENT PROCEDURES.
Section 8c of the Agricultural Adjustment Act (7
U.S.C. 608c), reenacted with amendments by the Agricul-
tural Marketing Agreement Act of 1937, is amended by
striking subsection (17) and inserting the following:
‘‘(17) PROVISIONS
APPLICABLE
TO
AMEND-
MENTS.—
‘‘(A) APPLICABILITY
TO
AMENDMENTS.—
The provisions of this section and section 8d ap-
plicable to orders shall be applicable to amend-
ments to orders.
‘‘(B) SUPPLEMENTAL
RULES
OF
PRAC-
TICE.—
‘‘(i) IN GENERAL.—Not later than 60
days after the date of enactment of this sub-
paragraph, the Secretary shall issue, using
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informal rulemaking, supplemental rules of
practice to define guidelines and timeframes
for the rulemaking process relating to
amendments to orders.
‘‘(ii) ISSUES.—At a minimum, the
supplemental 
rules 
of 
practice 
shall
establish—
‘‘(I) proposal submission require-
ments;
‘‘(II) pre-hearing information ses-
sion specifications;
‘‘(III) written testimony and data
request requirements;
‘‘(IV) public participation time-
frames; and
‘‘(V) electronic document submis-
sion standards.
‘‘(iii) EFFECTIVE DATE.—The supple-
mental rules of practice shall take effect not
later than 120 days after the date of enact-
ment of this subparagraph, as determined
by the Secretary.
‘‘(C) HEARING TIMEFRAMES.—
‘‘(i) IN GENERAL.—Not more than 30
days after the receipt of a proposal for an
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amendment hearing regarding a milk mar-
keting order, the Secretary shall—
‘‘(I) issue a notice providing an
action plan and expected timeframes
for completion of the hearing not more
than 180 days after the date of the
issuance of the notice;
‘‘(II)(aa) issue a request for addi-
tional information to be used by the
Secretary in making a determination
regarding the proposal; and
‘‘(bb) if the additional informa-
tion is not provided to the Secretary
within the timeframe requested by the
Secretary, issue a denial of the request;
or
‘‘(III) issue a denial of the re-
quest.
‘‘(ii) NOTICE.—A notice issued under
clause (i)(I) shall be individualized for each
proceeding and take into consideration—
‘‘(I) the number of orders affected;
‘‘(II) the complexity of issues in-
volved; and
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‘‘(III) the extent of the analyses
required by applicable Executive orders
(including Executive orders relating to
civil rights, regulatory flexibility, and
economic impact).
‘‘(iii) RECOMMENDED
DECISIONS.—A
recommended 
decision 
on 
a 
proposed
amendment to an order shall be issued not
later than 90 days after the deadline estab-
lished after the hearing for the submission
of post-hearing briefs, unless otherwise pro-
vided in the initial notice issued under
clause (i)(I).
‘‘(iv) FINAL DECISIONS.—A final deci-
sion on a proposed amendment to an order
shall be issued not later than 60 days after
the deadline for submission of comments
and exceptions to the recommended decision
issued under clause (ii), unless otherwise
provided in the initial notice issued under
clause (i)(I).
‘‘(D) INDUSTRY ASSESSMENTS.—If the Sec-
retary determines it is necessary to improve or
expedite rulemaking under this subsection, the
Secretary may impose an assessment on the af-
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fected industry to supplement appropriated
funds for the procurement of service providers,
such as court reporters.
‘‘(E) USE OF INFORMAL RULEMAKING.—The
Secretary may use rulemaking under section 553
of title 5, United States Code, to amend orders,
other than provisions of orders that directly af-
fecting milk prices.
‘‘(F) MONTHLY FEED AND FUEL COSTS FOR
MAKE ALLOWANCES.—As part of any hearing to
adjust make allowances under marketing orders,
the Secretary shall—
‘‘(i) determine the average monthly
prices of feed and fuel incurred by dairy
producers in the relevant marketing area;
‘‘(ii) consider the most recent monthly
feed and fuel price data available; and
‘‘(iii) consider those prices in deter-
mining whether or not to adjust make al-
lowances.’’.
SEC. 1606. DAIRY FORWARD PRICING PROGRAM.
(a) IN GENERAL.—Section 23 of the Agricultural Ad-
justment Act (7 U.S.C. 627), reenacted with amendments
by the Agricultural Marketing Agreement Act of 1937, is
amended—
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(1) in the section heading, by striking ‘‘PILOT’’;
(2) by striking subsection (a) and inserting the
following:
‘‘(a) PROGRAM REQUIRED.—The Secretary of Agri-
culture shall establish a program under which milk pro-
ducers and cooperative associations of producers are author-
ized to voluntarily enter into forward price contracts with
milk handlers.’’;
(3) in subsection (c)—
(A) in the subsection heading, by striking
‘‘PILOT’’; and
(B) in paragraph (1), by striking ‘‘pilot’’;
(4) by striking subsections (d) and (e); and
(5) by adding at the end the following:
‘‘(d) VOLUNTARY PROGRAM.—
‘‘(1) IN GENERAL.—A milk handler may not re-
quire participation in a forward price contract as a
condition of the handler receiving milk from a pro-
ducer or cooperative association of producers.
‘‘(2) EFFECT
OF
NONPARTICIPATION.—A pro-
ducer or cooperative association that does not enter
into a forward price contract may continue to have
milk priced under the minimum payment provisions
of the applicable milk marketing order.
‘‘(3) COMPLAINTS.—The Secretary shall—
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‘‘(A) investigate complaints made by pro-
ducers or cooperative associations of coercion by
handlers to enter into forward price contracts;
and
‘‘(B) if the Secretary finds evidence of coer-
cion, take appropriate action.
‘‘(e) DURATION.—No forward price contract under this
section may—
‘‘(1) be entered into after September 30, 2012; or
‘‘(2) may extend beyond September 30, 2015.’’.
(b) CONFORMING AMENDMENTS.—Section 23 of the
Agricultural Adjustment Act (7 U.S.C. 627), reenacted with
amendments by the Agricultural Marketing Agreement Act
of 1937, is amended by striking ‘‘cooperatives’’ each place
it appears in subsections (b) and (c)(2) and inserting ‘‘co-
operative associations of producers’’.
SEC. 1607. REPORT ON DEPARTMENT OF AGRICULTURE RE-
PORTING PROCEDURES FOR NONFAT DRY
MILK.
Not later than 90 days after the date of the enactment
of this Act, the Secretary shall submit to the Committee on
Agriculture of the House of Representatives and the Com-
mittee on Agriculture, Nutrition, and Forestry of the Senate
a report regarding Department of Agriculture reporting
procedures for nonfat dry milk and the impact of the proce-
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dures on Federal milk marketing order minimum prices
during the period beginning on July 1, 2006, and ending
on the date of the enactment of this Act.
SEC. 1608. FEDERAL MILK MARKETING ORDER REVIEW COM-
MISSION.
(a) DEFINITION OF ASCARR INSTITUTION.—In this
section:
(1) IN GENERAL.—The term ‘‘ASCARR Institu-
tion’’ means a public college or university offering a
baccalaureate or higher degree in the study of agri-
culture.
(2) EXCLUSIONS.—The term ‘‘ASCARR Institu-
tion’’ does not include an institution eligible to re-
ceive funds under—
(A) the Act of July 2, 1862 (commonly
known as the ‘‘First Morrill Act’’) (7 U.S.C. 301
et seq.);
(B) the Act of August 30, 1890 (commonly
known as the ‘‘Second Morrill Act’’) (7 U.S.C.
321 et seq.); or
(C) the Equity in Educational Land-Grant
Status Act of 1994 (Public Law 103–382; 7
U.S.C. 301 note).
(b) ESTABLISHMENT.—Subject to the availability of
funds appropriated to carry out this section, the Secretary
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shall establish a commission to be known as the ‘‘Federal
Milk Marketing Order Review Commission’’ (referred to in
this section as the ‘‘Commission’’), which shall conduct a
comprehensive review and evaluation of—
(1) the Federal milk marketing order system in
effect on the date of enactment of this Act; and
(2) non-Federal milk marketing order systems.
(c) ELEMENTS
OF REVIEW
AND EVALUATION.—As
part of the review and evaluation under subsection (b), the
Commission shall consider legislative and regulatory op-
tions for—
(1) ensuring that the competitiveness of dairy
products with other competing products in the mar-
ketplace is preserved and enhanced;
(2) ensuring that dairy producers receive fair
and reasonable minimum prices;
(3) enhancing the competitiveness of United
States dairy producers in world markets;
(4) preventing anticompetitive behavior and en-
suring that dairy markets are not prone to manipula-
tion;
(5) increasing the responsiveness of the Federal
milk marketing order system to market forces;
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(6) streamlining and expediting the process by
which amendments to Federal milk market orders are
adopted;
(7) simplifying the Federal milk marketing order
system;
(8) evaluating whether the Federal milk mar-
keting order system, established during the Great De-
pression, continues to serve the interests of the public,
dairy processors, and dairy producers;
(9) evaluating whether Federal milk marketing
orders are operating in a manner to minimize costs
to taxpayers and consumers, while still maintaining
a fair price for producers;
(10) evaluating the nutritional composition of
milk, including the potential benefits and costs of ad-
justing the milk content standards;
(11) evaluating the economic benefits to milk
producers 
of 
establishing 
a 
2-class 
system 
of
classifying milk consisting of a fluid milk class and
a manufacturing grade milk class, with the price of
both classes determined using the component prices of
butterfat, protein, and other solids; and
(12) evaluating a change in advance pricing that
is used to calculate the advance price of Class II skim
milk under Federal milk marketing orders using the
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4-week component prices that are used to calculate
prices for Class III and Class IV milk.
(d) MEMBERSHIP.—
(1) COMPOSITION.—The Commission shall con-
sist of 18 members.
(2) MEMBERS.—As soon as practicable after the
date on which funds are first made available to carry
out this section—
(A) 2 members of the Commission shall be
appointed by the Chairman of the Committee on
Agriculture of the House of Representatives, in
consultation with the ranking member of that
committee;
(B) 2 members of the Commission shall be
appointed by the Chairman of the Committee on
Agriculture, Nutrition, and Forestry of the Sen-
ate, in consultation with the ranking member of
that committee;
(C) 10 members of the Commission shall be
appointed by the Secretary;
(D) 2 members of the Commission shall be
appointed by the Chairman of the Subcommittee
on Agriculture, Rural Development, Food and
Drug Administration, and Related Agencies of
the House of Representatives, in consultation