Milk Price Support Bill Statement on Signing H.R. 4167 Into Law.

I have today signed H.R. 4167, which will support milk prices at between 80 and 90 percent of parity for the next 2 years. This is the latest in a series of important steps my administration has taken to ensure that dairy farmers have the economic incentive they need to produce ample supplies of milk and thereby reduce inflationary pressure.

For most of the last 2 years, supplies of dairy products have been tight and prices high, at least partly as a result of decisions made before this administration came into office that held returns to dairy farmers to very low levels. The result was a cutback in dairy herds, which made it impossible for the industry to respond to strengthened economic incentives in 1977 and 1978. The industry has now overcome the effects of these low returns, and we can expect good production this year and next.

There is currently some concern that milk production could exceed demand sometime during the next 2 years. It may become necessary to give the Secretary of Agriculture authority to adjust the future rate of increase in support levels should supplies become excessive.

I recognize that the dairy outlook is unusually uncertain this year. Secretary Bergland has been in constant touch with key Members of Congress and with leaders of the dairy industry throughout the development of this legislation. They have assured the Secretary that they will work with the Department of Agriculture to monitor dairy developments and to seek legislative action if it appears government stocks will reach excessive levels.

I am pleased with this administration's record of support for sound dairy programs. Our dairy programs work and work well, because they serve both producers and consumers. With this law, we will be continuing this important effort for another 2 years.