Dairy Income Fairness Act of 2013 - Establishes a dairy production margin protection program under which participating dairy operations are paid: (1) basic production margin protection program payments when production margins are less than threshold levels, and (2) supplemental production margin protection program payments if purchased by a participating dairy operation.
Provides for a transition period under which the dairy production margin protection program and the milk income loss program shall both be in existence and producers may participate in either program.
Establishes a dairy market stabilization program to assist in balancing the supply of milk with demand when participating dairy operations are experiencing low or negative operating margins.
Terminates the production margin protection and stabilization programs on December 31, 2017.
Repeals: (1) the dairy products price support program, (2) the milk income loss contract program, and (3) the dairy export incentive program.
Extends: (1) the dairy indemnity program, (2) the dairy forward pricing program, and (3) the dairy promotion and research program.
Directs the Secretary of Agriculture (USDA) to use a pre-hearing public information session to determine whether to conduct a formal hearing to consider alternative formulas for Class III milk product pricing.
Directs the Secretary to conduct hearings to: (1) analyze the implications of transitioning from a four-class system for milk products to a two-class system, (2) explore methods to improve signals for price discovery to allow dairy producers to better use risk management tools, and (3) assess whether a two-class competitive pay pricing system for milk products would be more or less transparent than the existing system.