Several dairy issues that were unresolved in the 108th Congress are continuing as issues of interest in the 109th Congress. Separate bills were introduced in the 108th Congress to extend authority for both the Milk Income Loss Contract (MILC) Program and the dairy forward pricing pilot program, and to address dairy producer concerns about the importation of milk protein concentrates. Moreover, federal dairy programs might be impacted this year since the final FY2006 budget resolution requires cuts in mandatory spending.

Under the 2002 farm bill-authorized MILC program, eligible dairy farmers can receive a direct government payment when the farm price of milk used for fluid consumption falls below an established target price. The program is scheduled to expire after September 30, 2005. Bills have been introduced in the 109th Congress to extend program authorization for two years, until September 2007. MILC program extension is supported by small to mid-sized dairy farms and the Administration. Some groups would like to see the payment limit raised to benefit larger dairy operations.