Dairy Unity Act of 1985

Dairy Unity Act of 1985 - Amends the Agricultural Act of 1949 to extend milk price supports for FY 1986 through 1990. Sets the preliminary support price as the product of $8.83 per hundred weight and the adjusted cost of production index (as formulated under this Act).

Directs the Secretary of Agriculture to establish such support level on October 1 of each year.

Directs the Secretary to provide for a support reduction if a milk diversion program is in effect. Extends milk diversion authority through FY 1990. Authorizes reductions if estimated purchases are between 5,000,000,000 pounds and 7,000,000,000 pounds, and requires them if such estimates exceed 7,000,000,000 pounds.

Provides a civil penalty for a person who purchases one or more dairy cattle for slaughter and fails to slaughter such cattle within a reasonable time.

Expresses the sense of the Congress that two years after the date of enactment of this Act the congressional agricultural committees should make an evaluation of the cost of production index.

Amends the Dairy Production Stabilization Act of 1983 to establish in the Department of Agriculture a National Dairy Research Endowment Institute to provide a permanent system for funding dairy market-expansion research activities.

Establishes in the Treasury a Dairy Research Trust Fund.

Extends through FY 1990: (1) the dairy indemnity program; and (2) the program authorizing dairy products to be transferred to the military and to veterans' hospitals.

Amends the Agricultural Adjustment Act, reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, to set forth minimum price adjustments for fluid milk marketing orders.

Amends the Agriculture and Food Act of 1981 to extend seasonal production adjustment authority through FY 1990.

Authorizes: (1) marketwide service payments; and (2) cooperative association representation.

States that the legal status of producer milk handlers under the Agricultural Adjustment Act, reenacted with amendments by the Agricultural Marketing Agreement Act of 1937, shall be the same after enactment of this Act as it was before such date.