Section 1 Short title
This Act may be cited as the “Dairy Margin Insurance Location Calculation Act of 2016” or the “Dairy MILC Act of 2016”.
Dairy Margin Insurance Location Calculation Act of 2016
A BILL
To amend the Agricultural Act of 2014 to require the Secretary of Agriculture to use data from each State to calculate average feed cost and actual dairy production margins, and for other purposes.
Sec. 2 Findings
Congress finds the following:
Section 1403 of the Agricultural Act of 2014 (7 U.S.C. 9053) established the margin protection program to protect dairy producers from harmfully low actual dairy production margins and ensure sustainable dairy production in every region of the United States.
However, the margin protection program omits factors such as energy, transportation, and labor prices in calculating average feed cost.
Such omitted factors contribute to variation in the feed prices paid by dairy producers.
Section 1402 of the Agricultural Act of 2014 (7 U.S.C. 9052) uses the average national feed cost to calculate the actual dairy production margin used by the margin protection program.
A recent analysis by Farm Credit East showed that the average price of feed paid by producers in the Northeast could be 20 percent higher than the average national feed cost.
Data from each State on average feed prices, average energy prices, average transportation prices, and average labor prices are therefore necessary to accurately calculate average feed cost.
The Secretary of Agriculture should use data from each State on the feed prices paid by dairy producers to calculate the actual dairy production margin to better protect dairy farmers from harmfully low actual dairy production margins.
Sec. 3 Calculation of average feed cost
In general— Section 1402(a) of the Agricultural Act of 2014 (7 U.S.C. 9052(a)) is amended to read as follows:
“(a) Calculation of Average Feed Cost
“(1) In general—The Secretary shall calculate the average feed cost using, from each of the 50 States and each territory or possession of the United States specified in section 1401(11), the following data:
“(A) The price of corn for a month.
“(B) The price of soybean meal for a month.
“(C) The price of alfalfa hay for a month.
“(2) Further considerations—For the purpose of calculating the average feed cost under paragraph (1), the Secretary shall also take into consideration energy costs, transportation costs, and labor costs.”
Effective date— The amendment made by this section shall take effect on the first day of the first consecutive 2-month period (as defined in section 1401 of the Agricultural Act of 2014 (7 U.S.C. 9051)) that begins after 180 days after the date of the enactment of this Act.