Butter-Powder Tilt is the
price adjustment strategy in United States, which requires the
USDA
The United States Department of Agriculture (USDA) is an United States federal executive departments, executive department of the Federal government of the United States, United States federal government that aims to meet the needs of commerc ...
to support the farm price of milk at
$9.90 per
cwt. by standing ready to purchase surplus butter, cheese and nonfat
dry milk
Powdered milk, also called milk powder, dried milk, or dry milk, is a manufactured dairy product made by evaporating milk to drying (food), dryness. One purpose of drying milk is to preserve it; milk powder has a far longer shelf life than liqu ...
when wholesale prices for these commodities fall below administratively set levels. The
2002 farm bill
The Farm Security and Rural Investment Act of 2002, also known as the 2002 Farm Bill, includes ten titles, addressing a great variety of issues related to agriculture, ecology, energy, trade, and nutrition. This act has been superseded by the 2 ...
(P.L. 107–171, Sec. 1501) allows USDA to adjust the government purchase price of butter and nonfat dry milk twice annually in order to better manage its inventories of surplus milk products and minimize
government
A government is the system or group of people governing an organized community, generally a State (polity), state.
In the case of its broad associative definition, government normally consists of legislature, executive (government), execu ...
costs. However, whenever the purchase price of one commodity is reduced by USDA, it must increase the purchase price of the other commodity so that the overall support price of milk remains at $9.90 per cwt. This price adjustment is referred to as the butter-powder tilt.
References
*{{CRS, article = Report for Congress: Agriculture: A Glossary of Terms, Programs, and Laws, 2005 Edition, url = https://web.archive.org/web/20110810044532/http://ncseonline.org/nle/crsreports/05jun/97-905.pdf, author= Jasper Womach
United States Department of Agriculture
Dairy farming in the United States
Agricultural subsidies