March 03, 2010

To Help NY Dairy Farmers And Protect Consumers, Gillibrand Pushes Legislation To Require Country Of Origin Labeling On All Dairy Products

Also Outlines Legislation To Ensure Stable Milk Prices By Requiring USDA To Audit Cold Storage Facilities

Washington, DC – Responding to yet another recall of milk from China, U.S. Senator Kirsten Gillibrand today announced her push for legislation that would require country of origin labeling (COOL) on all dairy products.  Just last month, the Chinese government recalled 170 tons of milk powder that had been tainted with melamine.  In 2008, milk tainted with melamine killed at least six infants and sickened more than 300,000 in China. According to the U.S. Department of Agriculture (USDA), during the past five years, U.S. dairy imports averaged around $2.7 billion annually.

If the U.S. cedes production of food to the lowest-cost producer, it leads to consolidation and eventually outsourcing.  Senator Gillibrand believes it is a national security imperative that there is food production in every part of this country.  In addition to Dairy COOL, Senator Gillibrand announced legislation to ensure stable farm milk pricing by requiring cold storage facilities to report their inventories to the USDA. 

“We must do more to protect consumers and provide a competitive edge to New York dairy farmers,” Senator Gillibrand said. “All consumers have the right to know whether the milk, yogurt and cheese that we buy are made in Upstate New York or China.  This legislation supports both families and farmers by requiring country of origin labeling on all dairy products.  With increasing dairy imports and alarming news about tainted products overseas, country of origin labeling provides critical information to parents and all adults that will help them make smart choices for their families.”

Every year an estimated 87 million Americans are sickened by contaminated food, 371,000 are hospitalized with food-borne illness, and 5,700 die from food-related disease, according to the Centers for Disease Control and Prevention.  To protect families from imported dairy products and strengthen New York’s dairy industry, Senator Gillibrand announced her plan:

Country of Origin Labeling for All Dairy Products
Food imports constitute a growing share of what is sold on grocery shelves across the country and what Americans eat.  Fifteen percent of America’s overall food supply is imported from overseas, including $5.2 billion worth of food from China alone.  Since 1996, the U.S.  agricultural trade surplus shrank from $27 billion to $8 billion in 2006.  Individual shipments of food from China increased from 82,000 shipments in 2002 to 199,000 in 2006.

Last year, the U.S. Department of Agriculture’s current COOL law went into effect requiring Country of Origin labeling for nuts, fruits, vegetables, meats, and seafood. The Dairy COOL Act would extend COOL requirements to include dairy products – milk, cheese, yogurt, ice cream, and butter.

Regularly Update Dairy Pricing Structures

The NASS (National Agricultural Statistics Service) survey, which keeps track of cheese inventory, has a large bearing on the price that farmers get paid for their milk.  Currently, the price farmers get for their milk is determined by a complex formula based largely on the price of cheese and how it is traded on the Chicago Mercantile Exchange.  Milk is valued by about 5 percent of national product being traded.  Thus, not having a full picture of cheese inventory potentially has huge impact on the price of milk for all dairy farmers in America.

While Senator Gillibrand is working to find solutions to this arcane pricing system before writing the next farm bill, in the short-term, she wants to ensure that the pricing system is accurate and fully transparent.

Currently, the cold storage facilities that house cheese inventories report their stocks to NASS on a voluntary basis.  For the facilities that do not report their stocks, NASS makes estimates of their inventory.

In February 2009, when NASS worked with facilities that had not been making reports to ascertain inventory, they found a 6 percent over-reporting between NASS estimates and actual stock.  This had the effect of keeping dairy prices artificially low, while inventory was reported higher than actually existed.

Senator Gillibrand plans to introduce legislation which would make the NASS survey mandatory, and require the USDA to conduct periodic audits to ensure that cold storage facilities are properly reporting their inventories.  Senator Gillibrand is working with USDA to create a mandatory reporting regime that increases transparency to ensure that the pricing regime, though flawed as it currently stands, is as accurate as possible.