Russ Feingold: Feingold Raises Concerns Over USDA’s Failure To Ensure Accurate Dairy Price Reporting

Despite Increase in Oversight, Report Requested by Feingold and Others Shows Cheese Trading Market Remains Susceptible to Manipulation

July 5, 2007 -- Washington, DC – U.S. Senator Russ Feingold (D-WI) expressed concern today following the release of a report showing the cheese trading market remains susceptible to price manipulation.

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A report released by the Government Accountability Office (GAO), which Feingold requested along with several other senators, concluded that prices can still be manipulated despite an increase in oversight of the cheese trading market over the past ten years. The report also exposes a lack of oversight by the Department of Agriculture (USDA), as it has failed to ensure accurate cheese price reporting after being given the authority over six years ago. After being prompted by a letter from Feingold in May, the USDA finally proposed auditing rules last week. Feingold requested the original report along with Senators Arlen Specter (R-PA), Hillary Clinton (D-NY), Chuck Schumer (D-NY) and Herb Kohl (D-WI), and then- Senator Jim Jeffords (I-VT).

“While it is good news that there have been marginal improvements in oversight of the cheese market over the past ten years, I am concerned that the market remains prone to manipulation,” Feingold said. “In particular, the USDA must improve its oversight of the prices it receives in order to better protect our hard-working dairy farmers.”

Last year, Feingold, along with the bipartisan group of senators, asked the GAO to investigate if cheese trading on the Chicago Mercantile Exchange was susceptible to price manipulation. The request for the GAO study came ten years after price manipulation was uncovered in cheese trading on the old National Cheese Exchange based in Green Bay, Wisconsin. Feingold has long called for better federal oversight of dairy pricing. In the upcoming Farm Bill, Feingold will consider ways to prod the USDA to take more seriously its responsibilities to ensure competition in the dairy market and to maintain communication with other federal agencies that are involved in cheese trading. The GAO recommendation that the USDA implement long-overdue auditing of price reports confirms the need for these protections, which Feingold called for in a letter to the USDA in May after faulty price reports for nonfat dry milk cost dairy farmers nearly fifty million dollars.

“I am committed to protecting the livelihood of farmers in Wisconsin and across the nation” Feingold said. “This report provides a better understanding of the legislative priorities that need to be set for our dairy industry, and coming on the heels of the nonfat dry milk pricing problems, highlights the need for the USDA to take its responsibilities much more seriously.”

Source: Senator Russ Feingold