WASHINGTON, DC – After weeks of negotiations, U.S. Senator Herb Kohl and Congressman Dave Obey successfully retained $350 million in additional assistance for dairy farmers as part of the House-Senate compromise version of the FY2010 Agriculture Appropriations Bill.

Kohl, who is chairman of the Senate Agriculture Appropriations panel, was the lead Senate negotiator and pushed to preserve the funds which originated in the Senate bill.  Obey, who chairs the House Appropriations Committee, was instrumental in securing the consent of House conferees.

Farmers are struggling with milk prices that have fallen to historic lows while the costs of production – including feed, fertilizer, and fuel – have grown.  The agreement includes $60 million in cheese and dairy product purchases for food banks and other nutrition and feeding programs, and $290 million in direct support to dairy farmers using guidelines to be determined by the Secretary of Agriculture under an expedited process.

Kohl and Obey have worked together for more than 10 years to ensure a better milk price safety net through direct payments when prices are low, and both supported provisions in the 2008 farm bill to strengthen the MILC program through inclusion of a ‘feed cost adjuster’ designed to enhance MILC payments when farmers need them most.

“These are desperate times in farming,” Kohl said.  “And we can’t lose sight of the fact that farming losses reverberate through our rural communities.  We hope this funding can provide a measure of relief to the farms and small businesses that are struggling to stay afloat through this storm of mounting costs and debt.”

Obey said, “I would have preferred that all the funds to be provided as direct payments through the existing MILC program formula.  We didn’t get everything we wanted, but the compromise ensures important and timely help to farmers and our rural communities.”

From January through April of 2009, the U.S. all-milk price has averaged $4.80 per hundredweight below the U.S. average cash cost of production.  During fiscal year 2009, the U.S. Department of Agriculture’s (USDA) Farm Service Agency has made more than $143 million in MILC payments to Wisconsin farmers.  USDA has also taken steps to bolster dairy markets through the Dairy Export Incentives Program and temporary adjustments to the Dairy Product Price Support Program.  In March, USDA transferred approximately 200 million pounds of nonfat dry milk to USDA’s Food and Nutrition Service in an effort to bolster markets and provide hunger relief.