166 
under section 156 of the Federal Agriculture 
Improvement and Reform Act of 1996 (7 
U.S.C. 7272). 
‘‘(2) ON OR AFTER APRIL 1.—On or after April 
1 of each fiscal year— 
‘‘(A) the Secretary may take action to in-
crease the supply of sugar in accordance with 
sections 359c(b)(2) and 359e(b), including an 
increase in the tariff-rate quota for raw cane 
sugar to accommodate the reassignment to im-
ports; and 
‘‘(B) if there is still a shortage of sugar in 
the United States market, and marketing of do-
mestic sugar has been maximized, the Secretary 
may increase the tariff-rate quota for raw cane 
sugar if the further increase will not threaten to 
result in the forfeiture of sugar pledged as col-
lateral for a loan under section 156 of the Fed-
eral Agriculture Improvement and Reform Act 
of 1996 (7 U.S.C. 7272).’’. 
(k) PERIOD OF EFFECTIVENESS.—Part VII of sub-
title B of title III of the Agricultural Adjustment Act of 
1938 (7 U.S.C. 1359aa) (as amended by subsection (j)) 
is amended by adding at the end the following: 
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‘‘SEC. 359l. PERIOD OF EFFECTIVENESS. 
‘‘(a) IN GENERAL.—This part shall be effective only 
for the 2008 through 2012 crop years for sugar. 
‘‘(b) TRANSITION.—The Secretary shall administer 
flexible marketing allotments for sugar for the 2007 crop 
year for sugar on the terms and conditions provided in 
this part as in effect on the day before the date of enact-
ment of this section.’’. 
SEC. 1404. STORAGE FACILITY LOANS. 
Section 1402(c) of the Farm Security and Rural In-
vestment Act of 2002 (7 U.S.C. 7971(c)) is amended— 
(1) in paragraph (1), by striking ‘‘and’’ at the 
end; 
(2) by redesignating paragraph (2) as para-
graph (3); 
(3) by inserting after paragraph (1) the fol-
lowing: 
‘‘(2) not include any penalty for prepayment; 
and’’; and 
(4) in paragraph (3) (as redesignated by para-
graph (2)), by inserting ‘‘other’’ after ‘‘on such’’. 
SEC. 1405. COMMODITY CREDIT CORPORATION STORAGE 
PAYMENTS. 
Subtitle E of the Federal Agriculture Improvement 
and Reform Act of 1996 (7 U.S.C. 7281 et seq.) is amend-
ed by adding at the end the following: 
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‘‘SEC. 167. COMMODITY CREDIT CORPORATION STORAGE 
PAYMENTS. 
‘‘(a) INITIAL CROP YEARS.—Notwithstanding any 
other provision of law, for each of the 2008 through 2011 
crop years, the Commodity Credit Corporation shall estab-
lish rates for the storage of forfeited sugar in an amount 
that is not less than— 
‘‘(1) in the case of refined sugar, 15 cents per 
hundredweight of refined sugar per month; and 
‘‘(2) in the case of raw cane sugar, 10 cents per 
hundredweight of raw cane sugar per month. 
‘‘(b) SUBSEQUENT CROP YEARS.—For each of the 
2012 and subsequent crop years, the Commodity Credit 
Corporation shall establish rates for the storage of for-
feited sugar in the same manner as was used on the day 
before the date of enactment of this section.’’. 
Subtitle E—Dairy 
SEC. 1501. DAIRY PRODUCT PRICE SUPPORT PROGRAM. 
(a) DEFINITION OF NET REMOVALS.—In this sec-
tion, the term ‘‘net removals’’ means— 
(1) the sum of— 
(A) the quantity of a product described in 
subsection (b) purchased by the Commodity 
Credit Corporation under this section; and 
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(B) the quantity of the product exported 
under section 153 of the Food Security Act of 
1985 (15 U.S.C. 713a–14); less 
(2) the quantity of the product sold for unre-
stricted use by the Commodity Credit Corporation. 
(b) SUPPORT ACTIVITIES.—During the period begin-
ning on January 1, 2008, and ending 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. 
(c) PURCHASE PRICE.—To carry out subsection (b) 
during the period specified in that subsection, the Sec-
retary shall purchase— 
(1) cheddar cheese in blocks at not less than 
$1.13 per pound; 
(2) cheddar cheese in barrels at not less than 
$1.10 per pound; 
(3) butter at not less than $1.05 per pound; 
and 
(4) nonfat dry milk at not less than $0.80 per 
pound. 
(d) TEMPORARY PRICE ADJUSTMENT TO AVOID EX-
CESS INVENTORIES.— 
(1) ADJUSTMENTS
AUTHORIZED.—The Sec-
retary may adjust the minimum purchase prices es-
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tablished under subsection (c) only as permitted 
under this subsection. 
(2) CHEESE
INVENTORIES
IN
EXCESS
OF 
200,000,000 POUNDS.—If net removals for a period of 
12 consecutive months exceed 200,000,000 pounds 
of cheese, but do not exceed 400,000,000 pounds, 
the Secretary may reduce the purchase prices under 
paragraphs (1) and (2) of subsection (c) during the 
immediately following month by not more than 10 
cents per pound. 
(3) CHEESE
INVENTORIES
IN
EXCESS
OF 
400,000,000 POUNDS.—If net removals for a period of 
12 consecutive months exceed 400,000,000 pounds 
of cheese, the Secretary may reduce the purchase 
prices under paragraphs (1) and (2) of subsection 
(c) during the immediately following month by not 
more than 20 cents per pound. 
(4) BUTTER
INVENTORIES
IN
EXCESS
OF 
450,000,000 POUNDS.—If net removals for a period of 
12 consecutive months exceed 450,000,000 pounds 
of butter, but do not exceed 650,000,000 pounds, 
the Secretary may reduce the purchase price under 
subsection (c)(3) during the immediately following 
month by not more than 10 cents per pound. 
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172 
respectively, under subsection (b) shall be uniform for all 
regions of the United States. 
(f) SALES FROM INVENTORIES.—In the case of each 
commodity specified in subsection (c) that is available for 
unrestricted use in the inventory of the Commodity Credit 
Corporation, the Secretary may sell the commodity at the 
market prices prevailing for that commodity at the time 
of sale, except that the sale price may not be less than 
110 percent of the minimum purchase price specified in 
subsection (c) for that commodity. 
SEC. 1502. DAIRY FORWARD PRICING PROGRAM. 
(a) PROGRAM REQUIRED.—The Secretary shall es-
tablish a program under which milk producers and cooper-
ative associations of producers are authorized to volun-
tarily enter into forward price contracts with milk han-
dlers. 
(b) MINIMUM MILK PRICE REQUIREMENTS.—Pay-
ments made by milk handlers to milk producers and coop-
erative associations of producers, and prices received by 
milk producers and cooperative associations, in accordance 
with the terms of a forward price contract authorized by 
subsection (a), shall be treated as satisfying— 
(1) all uniform and minimum milk price re-
quirements of subparagraphs (B) and (F) of para-
graph (5) of section 8c of the Agricultural Adjust-
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173 
ment Act (7 U.S.C. 608c), reenacted with amend-
ments by the Agricultural Marketing Agreement Act 
of 1937; and 
(2) the total payment requirement of subpara-
graph (C) of that paragraph. 
(c) MILK COVERED BY PROGRAM.— 
(1) COVERED MILK.—The program shall apply 
only with respect to the marketing of federally regu-
lated milk that— 
(A) is not classified as Class I milk or oth-
erwise intended for fluid use; and 
(B) is in the current of interstate or for-
eign commerce or directly burdens, obstructs, or 
affects interstate or foreign commerce in feder-
ally regulated milk. 
(2) RELATION
TO
CLASS
I
MILK.—To assist 
milk handlers in complying with paragraph (1)(A) 
without having to segregate or otherwise individually 
track the source and disposition of milk, a milk han-
dler may allocate milk receipts from producers, co-
operatives, and other sources that are not subject to 
a forward contract to satisfy the obligations of the 
handler with regard to Class I milk usage. 
(d) VOLUNTARY PROGRAM.— 
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174 
(1) IN GENERAL.—A milk handler may not re-
quire participation in a forward pricing contract as 
a condition of the handler receiving milk from a pro-
ducer or cooperative association of producers. 
(2) PRICING.—A producer or cooperative asso-
ciation described in paragraph (1) may continue to 
have their milk priced in accordance with the min-
imum payment provisions of the Federal milk mar-
keting order. 
(3) COMPLAINTS.— 
(A) IN GENERAL.—The Secretary shall in-
vestigate complaints made by producers or co-
operative associations of coercion by handlers to 
enter into forward contracts. 
(B) ACTION.—If the Secretary finds evi-
dence of coercion, the Secretary shall take ap-
propriate action. 
(e) DURATION.— 
(1) NEW CONTRACTS.—No forward price con-
tract may be entered into under the program estab-
lished under this section after September 30, 2012. 
(2) APPLICATION.—No forward contract en-
tered into under the program may extend beyond 
September 30, 2015. 
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SEC. 1503. DAIRY EXPORT INCENTIVE PROGRAM. 
(a) EXTENSION.—Section 153(a) of the Food Secu-
rity Act of 1985 (15 U.S.C. 713a–14(a)) is amended by 
striking ‘‘2007’’ and inserting ‘‘2012’’. 
(b) COMPLIANCE WITH TRADE AGREEMENTS.—Sec-
tion 153 of the Food Security Act of 1985 (15 U.S.C. 
713a–14) is amended— 
(1) in subsection (c), by striking paragraph (3) 
and inserting the following: 
‘‘(3) the maximum volume of dairy product ex-
ports allowable consistent with the obligations of the 
United States under the Uruguay Round Agree-
ments approved under section 101 of the Uruguay 
Round Agreements Act (19 U.S.C. 3511) is exported 
under the program each year (minus the volume sold 
under section 1163 of this Act during that year), ex-
cept to the extent that the export of such a volume 
under the program would, in the judgment of the 
Secretary, exceed the limitations on the value per-
mitted under subsection (f); and’’; and. 
(2) in subsection (f), by striking paragraph (1) 
and inserting the following: 
‘‘(1) FUNDS
AND
COMMODITIES.—Except as 
provided in paragraph (2), the Commodity Credit 
Corporation shall in each year use money and com-
modities for the program under this section in the 
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maximum amount consistent with the obligations of 
the United States under the Uruguay Round Agree-
ments approved under section 101 of the Uruguay 
Round Agreements Act (19 U.S.C. 3511), minus the 
amount expended under section 1163 of this Act 
during that year.’’. 
SEC. 1504. 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 
applicable to orders shall be applicable to 
amendments to orders. 
‘‘(B) SUPPLEMENTAL
RULES
OF
PRAC-
TICE.— 
‘‘(i) IN GENERAL.—Not later than 60 
days after the date of enactment of this 
subparagraph, the Secretary shall issue, 
using informal rulemaking, supplemental 
rules of practice to define guidelines and 
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timeframes for the rulemaking process re-
lating to amendments to orders. 
‘‘(ii) ISSUES.—At a minimum, the 
supplemental rules of practice shall estab-
lish— 
‘‘(I) proposal submission require-
ments; 
‘‘(II) 
pre-hearing 
information 
session 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 
enactment of this subparagraph, as deter-
mined by the Secretary. 
‘‘(C) HEARING TIMEFRAMES.— 
‘‘(i) IN GENERAL.—Not more than 30 
days after the receipt of a proposal for an 
amendment hearing regarding a milk mar-
keting order, the Secretary shall— 
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‘‘(I) issue a notice providing an 
action plan and expected timeframes 
for completion of the hearing not 
more than 120 days after the date of 
the issuance of the notice; 
‘‘(II)(aa) issue a request for ad-
ditional 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 re-
quest; or 
‘‘(III) issue a denial of the re-
quest. 
‘‘(ii) REQUIREMENT.—A post-hearing 
brief may be filed under this paragraph 
not later than 60 days after the date of an 
amendment hearing regarding a milk mar-
keting order. 
‘‘(iii) RECOMMENDED DECISIONS.—A 
recommended decision on a proposed 
amendment to an order shall be issued not 
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later than 90 days after the deadline for 
the submission of post-hearing briefs. 
‘‘(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 deci-
sion issued under clause (iii). 
‘‘(D) INDUSTRY
ASSESSMENTS.—If the 
Secretary determines it is necessary to improve 
or expedite rulemaking under this subsection, 
the Secretary may impose an assessment on the 
affected 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 sec-
tion 553 of title 5, United States Code, to 
amend orders, other than provisions of orders 
that directly affect milk prices. 
‘‘(F) AVOIDING DUPLICATION.—The Sec-
retary shall not be required to hold a hearing 
on any amendment proposed to be made to a 
milk marketing order in response to an applica-
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180 
tion for a hearing on the proposed amendment 
if— 
‘‘(i) the application requesting the 
hearing is received by the Secretary not 
later than 90 days after the date on which 
the Secretary has announced the decision 
on a previously proposed amendment to 
that order; and 
‘‘(ii) the 2 proposed amendments are 
essentially the same, as determined by the 
Secretary. 
‘‘(G) MONTHLY
FEED
AND
FUEL
COSTS 
FOR MAKE ALLOWANCES.—As part of any hear-
ing to adjust make allowances under marketing 
orders commencing prior to September 30, 
2012, 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.’’. 
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SEC. 1505. DAIRY INDEMNITY PROGRAM. 
Section 3 of Public Law 90–484 (7 U.S.C. 450l) is 
amended by striking ‘‘2007’’ and inserting ‘‘2012’’. 
SEC. 1506. MILK INCOME LOSS CONTRACT PROGRAM. 
(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 ‘‘eligi-
ble 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 Ad-
justment Act (7 U.S.C. 608c), reenacted with 
amendments by the Agricultural Marketing Agree-
ment Act of 1937. 
(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 
determined by the Secretary)— 
(A) shares in the risk of producing milk; 
and 
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182 
(B) makes contributions (including land, 
labor, management, equipment, or capital) to 
the dairy farming operation of the individual or 
entity 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 participating State under which the producers receive 
payments on eligible production. 
(c) AMOUNT.—Payments to a producer under this 
section shall be calculated by multiplying (as determined 
by the Secretary)— 
(1) the payment quantity for the producer dur-
ing the applicable month established under sub-
section (e); 
(2) the amount equal to— 
(A) $16.94 per hundredweight, as adjusted 
under subsection (d); less 
(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; 
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(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
RATE
ADJUSTMENT
FOR
FEED 
PRICES.— 
(1) INITIAL ADJUSTMENT AUTHORITY.—During 
the period beginning on January 1, 2008, and end-
ing on August 31, 2012, if the National Average 
Dairy Feed Ration Cost for a month during that pe-
riod is greater than $7.35 per hundredweight, the 
amount specified in subsection (c)(2)(A) used to de-
termine the payment rate for that month shall be in-
creased by 45 percent of the percentage by which 
the National Average Dairy Feed Ration Cost ex-
ceeds $7.35 per hundredweight. 
(2) SUBSEQUENT ADJUSTMENT AUTHORITY.— 
For any month beginning on or after September 1, 
2012, if the National Average Dairy Feed Ration 
Cost for the month is greater than $9.50 per hun-
dredweight, the amount specified in subsection 
(c)(2)(A) used to determine the payment rate for 
that month shall be increased by 45 percent of the 
percentage by which the National Average Dairy 
Feed Ration Cost exceeds $9.50 per hundredweight. 
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