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The Agricultural Adjustment Act (AAA) was a United States federal law of the New Deal era designed to boost agricultural prices by reducing surpluses. The government bought livestock for slaughter and paid farmers subsidies not to plant on part of their land. The money for these subsidies was generated through an exclusive tax on companies which processed farm products. The Act created a new agency, the Agricultural Adjustment Administration, an agency of the U.S. Department of Agriculture, to oversee the distribution of the subsidies. The Agriculture Marketing Act, which established the Federal Farm Board in 1929, was seen as an important precursor to this act. The AAA, along with other New Deal programs, represented the federal government's first substantial effort to address economic welfare in the United States.
A dairy is a business enterprise established for the harvesting or processing of animal milk – mostly from cows or buffaloes, but also from goats, sheep, horses, or camels – for human consumption. A dairy is typically located on a dedicated dairy farm or in a section of a multi-purpose farm that is concerned with the harvesting of milk.
The Chicago Mercantile Exchange (CME) is a global derivatives marketplace based in Chicago and located at 20 S. Wacker Drive. The CME was founded in 1898 as the Chicago Butter and Egg Board, an agricultural commodities exchange. Originally, the exchange was a non-profit organization. The Merc demutualized in November 2000, went public in December 2002, and merged with the Chicago Board of Trade in July 2007 to become a designated contract market of the CME Group Inc., which operates both markets. The chairman and chief executive officer of CME Group is Terrence A. Duffy, Bryan Durkin is president. On August 18, 2008, shareholders approved a merger with the New York Mercantile Exchange (NYMEX) and COMEX. CME, CBOT, NYMEX, and COMEX are now markets owned by CME Group. After the merger, the value of the CME quadrupled in a two-year span, with a market cap of over $25 billion.
Powdered milk, also called dried milk, or milk powder, is a manufactured dairy product made by evaporating milk to dryness. One purpose of drying milk is to preserve it; milk powder has a far longer shelf life than liquid milk and does not need to be refrigerated, due to its low moisture content. Another purpose is to reduce its bulk for the economy of transportation. Powdered milk and dairy products include such items as dry whole milk, nonfat (skimmed) dry milk, dry buttermilk, dry whey products and dry dairy blends. Many exported dairy products conform to standards laid out in Codex Alimentarius. Many forms of milk powder are traded on exchanges.
The Richard B. Russell National School Lunch Act is a 1946 United States federal law that created the National School Lunch Program (NSLP) to provide low-cost or free school lunch meals to qualified students through subsidies to schools. The program was established as a way to prop up food prices by absorbing farm surpluses, while at the same time providing food to school age children. It was named after Richard Russell, Jr., signed into law by President Harry S. Truman in 1946, and entered the federal government into schools' dietary programs on June 4, 1946.
Government cheese is processed cheese provided to welfare beneficiaries, Food Stamp recipients, and the elderly receiving Social Security in the United States, as well as to food banks and churches. This processed cheese was used in military kitchens during World War II and has been used in schools since the 1950s.
The Federal Agriculture Improvement and Reform Act of 1996, known informally as the Freedom to Farm Act, the FAIR Act, or the 1996 U.S. Farm Bill, was the omnibus 1996 farm bill that, among other provisions, revises and simplifies direct payment programs for crops and eliminates milk price supports through direct government purchases.
The Agricultural Act of 1949 is a United States federal law that is known as the "permanent legislation" of U.S. agricultural policy and is, in its amended form, still in effect. The Act was enacted on October 31, 1949. The purpose of the act is "To provide assistance to the States in the establishment, maintenance, operation, and expansion of school-lunch programs, and for other purposes."
The Federal Surplus Commodities Corporation was one of the so-called alphabet agencies set up in the United States during the 1930s as part of President Franklin D. Roosevelt's New Deal. Created in 1933 as the Federal Surplus Relief Corporation, its name was changed by charter amendment on November 18, 1935. In 1937 its administration was placed within the United States Department of Agriculture. In 1940 it was combined with other USDA initiatives to form the Surplus Marketing Administration. It was abolished February 23, 1942, with the creation of the Agricultural Marketing Administration.
The agricultural policy of the United States is composed primarily of the periodically renewed federal U.S. farm bills. The Farm Bills have a rich history which initially sought to provide income and price support to US farmers and prevent them from adverse global as well as local supply and demand shocks. This implied an elaborate subsidy program which supports domestic production by either direct payments or through price support measures. The former incentivizes farmers to grow certain crops which are eligible for such payments through environmentally conscientious practices of farming. The latter protects farmers from vagaries of price fluctuations by ensuring a minimum price and fulfilling their shortfalls in revenue upon a fall in price. Lately, there are other measures through which the government encourages crop insurance and pays part of the premium for such insurance against various unanticipated outcomes in agriculture.
In the United States, the Dairy Price Support Program is the federal government program that maintains a minimum farm price for milk used in the manufacture of dairy products. It is one of many agricultural support programs. Under the dairy program, the United States Department of Agriculture (USDA) indirectly assures a minimum price for milk by purchasing any cheddar cheese, nonfat dry milk, and butter offered to it by dairy processors at stated prices. These purchase prices are set high enough to enable dairy processors to pay farmers at least the support price for the milk they use in manufacturing these products.
TheEmergency Food Assistance Program (TEFAP) is a program that evolved out of surplus commodity donation efforts begun by the USDA in late 1981 to dispose of surplus foods held by the Commodity Credit Corporation (CCC). This program was explicitly authorized by the Congress in 1983 when funding was provided to assist states with the costs involved in storing and distributing the commodities. The program originally was entitled the Temporary Emergency Food Assistance Program when authorized under the Temporary Emergency Food Assistance Act of 1983. The program is now known as The Emergency Food Assistance Program (TEFAP).
The Food Security Act of 1985, a 5-year omnibus farm bill, allowed lower commodity price and income supports and established a dairy herd buyout program. This 1985 farm bill made changes in a variety of other USDA programs. Several enduring conservation programs were created, including sodbuster, swampbuster, and the Conservation Reserve Program.
The Soil Bank Act of 1956 was part of the Agricultural Act of 1956 passed by the U.S. Congress. This act created the Soil Bank Program, which removed farmland from production in an effort to reduce large crop surpluses after World War II. Land deposited into the Soil Bank was then converted into conservation use. The idea for the Soil Bank was taken from legislation from the 1930s dust bowl and was similar to many depression-era solutions to lower crop prices. Eventually, the Soil Bank act of 1956 was overturned by the Food and Agriculture Act of 1965.
Milk Income Loss Contract (MILC) Payments is the name given by USDA to the dairy farmer counter-cyclical payments program, authorized by the 2002 farm bill. Under the program, dairy farmers nationwide are eligible for a federal payment whenever the minimum monthly market price for farm milk used for fluid consumption in Boston falls below $16.94/cwt. A producer potentially can receive a payment equal to 45 percent of the difference between the $16.94 per cwt. target price and the market price, in any month that the Boston market price falls below $16.94. A producer can receive a payment on all milk production during that month, but no payments will be made on any annual production in excess of 2.4 million pounds per dairy operation. On average this limit is reached by a milking herd of 130 cows. MILC payments apply to production beginning December 1, 2002 through September 30, 2012.
Milk equivalent is a measure of the quantity of fluid milk used in a processed dairy product. Measured on a milkfat basis, it takes about 21.8 pounds of farm milk to make a pound of butter, and about 9.2 pounds to make a pound of American cheese. Measured on a skim solids basis, it takes about 11.6 pounds of farm milk to make a pound of nonfat dry milk. Farm milk weighs about 8.6 pounds per gallon.
Marketing orders and agreements in United States agricultural policy allow producers to promote orderly marketing through collectively influencing the supply, demand, or price of a particular commodity. Research and promotion can be financed with pooled funds.
In United States agricultural policy, the make allowance is the margin between the government support price for milk and the Commodity Credit Corporation (CCC) purchase price for butter, nonfat dry milk, and cheese. This margin is administratively set to cover the costs of “making” milk into butter, nonfat dry milk, or cheese to reach the desired level of prices for milk in manufacturing uses.
The butter mountain is a supply surplus of butter produced in the European Union because of government interventionism that began in the 1970s. The size of the surplus changed significantly over time and mostly disappeared by 2017, which has led to shortages. Other surpluses were described as beef mountains, milk lakes, wine lakes and grain mountains.
Supply management (SM) is a national agricultural policy framework used in Canada that controls the supply of dairy, poultry and eggs through production and import controls and pricing mechanisms. The supply management system was authorized by the 1972 Farm Products Agencies Act, which established the two national agencies that oversee the system. The Agriculture and Agri-Food Canada federal department is responsible for both the Canadian Dairy Commission and its analogue for eggs, chicken and turkey products, the Farm Products Council of Canada. Five national supply management organizations, the SM-5 Organizations — Egg Farmers of Canada (EFC), Turkey Farmers of Canada (TFC), Chicken Farmers of Canada (CFC), the Canadian Hatching Egg Producers (CHEP) and the Ottawa-based Canadian Dairy Commission (CDC), a Crown corporation — in collaboration with provincial and national governing agencies, organizations and committees, administer the supply management system.
References
This article incorporates public domain material from the Congressional Research Service document: Jasper Womach. "Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition" (PDF).
