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RMFU Calls for Investigation of Misreporting

Denver>>>Today Rocky Mountain Farmers Union (RMFU) sent a letter to Colorado’s representatives on the Senate and House Agriculture Committees requesting a congressional hearing to investigate the misreporting of nonfat dry milk prices and sales volume from April 2006 to April 2007.

In May of this year, when the error was announced, RMFU urged U.S. Secretary of Agriculture Michael Johanns to review the price reporting and to take four additional steps: 1) prevent repeated misreporting in the future; 2) provide a full explanation for the department’s failure to implement existing audit measures as directed by Congress; 3) adjust prices of other classes of milk; and, 4) indemnify milk producers for losses.

In June, the USDA released an impact report on the errors made in the misreporting. The reporting error has been estimated conservatively as a loss of $50 million. Some in the dairy industry believe the report underestimates the total impact on dairy farmers. The report failed to address the four points listed above.

“A reporting error that costs dairy producers $50 million in losses is unacceptable,” stated Kent Peppler, President, Rocky Mountain Farmers Union, a Mead, Colo., farmer. “The economic well-being of dairy producers throughout our region has a direct effect on other family farmers who produce dairy supplies such as feed. This error has a broad economic impact throughout the agriculture community.” In July, the RMFU Board of Directors passed a resolution to join with National Farmers Union calling for an investigative hearing by both agriculture committees. In the letter to congressional representatives on the agriculture committees, RMFU requests that the hearing determine: 1) how and why misreporting occurred for a period of a full year; 2) whether parties in the dairy industry intentionally misreported weekly sales/prices to the USDA; 3) what steps the USDA is taking to avoid this from happening again; 4) whether the error had an impact on other classes of milk; and, 5) how the USDA plans to compensate producers hurt economically.

”We appreciate the leadership of Senator Salazar (D-Colo.), Reps. Musgrave (R-Colo.), and Salazar (D-Colo.), on the agriculture committee,” said Peppler. “We hope they will take the lead on this important issue.”

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