I 
110TH CONGRESS 
1ST SESSION H. R. 2462 
To amend the Farm Security and Rural Investment Act of 2002 to promote 
growth and opportunity for the dairy industry in the United States, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
MAY 23, 2007 
Mr. HOLDEN introduced the following bill; which was referred to the Com-
mittee on Agriculture, and in addition to the Committee on Ways and 
Means, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To amend the Farm Security and Rural Investment Act 
of 2002 to promote growth and opportunity for the dairy 
industry in the United States, and for other purposes. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. REPEAL OF DAIRY PRICE SUPPORT PROGRAM. 
(a) IN GENERAL.—Section 1501 of the Farm Secu-
rity and Rural Investment Act of 2002 (7 U.S.C. 7981) 
is repealed. 
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(b) CONFORMING AMENDMENT.—Section 1507 of the 
Farm Security and Rural Investment Act of 2002 (7 
U.S.C. 7983) is repealed. 
SEC. 2. MILK TARGET PRICE PROGRAM. 
Section 1502 of the Farm Security and Rural Invest-
ment Act of 2002 (7 U.S.C. 7982) is amended— 
(1) by striking the section heading and insert-
ing ‘‘MILK TARGET PRICE PROGRAM’’; 
(2) in subsection (a), by striking paragraph (1) 
and inserting the following: 
‘‘(1) CLASS
III
MILK.—The term ‘Class III 
milk’ means milk (including milk components) classi-
fied as milk for manufacturing purposes under a 
Federal milk marketing order.’’; 
(3) by striking subsection (c) and inserting the 
following: 
‘‘(c) AMOUNT.— 
‘‘(1) IN GENERAL.—Subject to paragraph (3), 
payments to a producer under this section shall be 
calculated by multiplying (as determined by the Sec-
retary)— 
‘‘(A) the payment quantity for the pro-
ducer during the applicable month established 
under subsection (d); by 
‘‘(B) the amount equal to— 
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‘‘(i) $12.00 per hundredweight (as ad-
justed under paragraph (2); less 
‘‘(ii) the Class III milk price per hun-
dredweight under the applicable Federal 
milk marketing order. 
‘‘(2) FEED
PRICE
INDEX
AND
ADJUSTMENT 
FACTOR.— 
‘‘(A) FEED PRICE INDEX.—The Secretary 
shall develop a feed price index, using a base-
line period of calendar years 2001 through 
2005, to reflect the feed cost of producing 100 
pounds of milk. 
‘‘(B) FEED
ADJUSTMENT
FACTOR.—The 
Secretary shall establish a feed adjustment fac-
tor that reflects changes in the feed price index, 
as determined by the Secretary. 
‘‘(C) ADJUSTMENT.—Each month that 
there is an increase in the feed price index, the 
Secretary shall adjust the amount described in 
paragraph (1)(B)(i) to reflect any increases in 
the feed adjustment factor. 
‘‘(3) MAXIMUM AMOUNT.—The maximum an-
nual payment for all producers on a single dairy op-
eration during the months of the applicable fiscal 
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year for which the producers receive payments under 
this section shall not exceed $50,000.’’; and 
(4) in subsections (f) and (g)(1), by striking 
‘‘September 30, 2007’’ both places it appears and 
inserting ‘‘September 30, 2012’’. 
SEC. 3. DAIRY OPTIONS PROGRAM. 
Subtitle E of title I of the Farm Security and Rural 
Investment Act of 2002 (7 U.S.C. 7981 et seq.) is amend-
ed by adding at the end the following: 
‘‘SEC. 1509. DAIRY OPTIONS PROGRAM. 
‘‘(a) ESTABLISHMENT.—The Secretary shall carry 
out a nationwide program under similar terms and condi-
tions as the Secretary used to carry out the dairy options 
pilot program established in accordance with section 191 
of the Federal Agricultural Improvement Reform Act of 
1996 (7 U.S.C. 7331). 
‘‘(b) FUNDING.— 
‘‘(1) COMMODITY CREDIT CORPORATION.—The 
Secretary shall use the funds, facilities, and authori-
ties of the Commodity Credit Corporation to carry 
out this section. 
‘‘(2) FUNDING AMOUNT.—Of the funds of the 
Commodity Credit Corporation, the Secretary shall 
use to carry out this section $25,000,000 for each 
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