Sec. 2. Findings
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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.
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