Eastern wants milk prices
tied to production costs
SYRACUSE, N.Y. - A
program has been developed
by Eastern Milk Producers,
to upgrade the Northeast’s
faltering farm economy,
according to John C. York,
the cooperative’s general
manager.
Testifying before a
Congressional Hearing held
by Congressman Donald J.
Mitchell at Herkimer
Community College in
Herkimer, N.Y. on Sep
tember 23, York outlined
problems depressing the
income of dairy farmers in
the Northeast and recom
mended ways of correcting
them.
York was quoted as
saying, “New York-New
Jersey Federal Order blend
prices fell below year earlier
levels in each of the months
of September 1974 through
May of this year. These
declines have ranged from a
low of minus 16 cents in
October 1974, to a high of
minus $1.05 in April of 1975.
April’s price was 12.1 per
cent below April of 1974.
While prices for the
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balance of 1975 are expected
to be above the same months
for 1974, this is partly due to
the fact that the 1974 prices
themselves were
unrealistically low. It is
expected that the average
price for 1975 will show only
moderate improvement over
1974 unless further action is
taken to raise prices.
While costs of dairy
farming have been in
creasing for many years,
they have been going up at
an accelerated rate since
mid-1972. The USDA Prices
paid by Farmers index for
July 1975 stands at 86 percent
above 1967 levels. The July
index was 10.7 percent above
July 1974, which in turn was
15.1 percent above July 1973.
These figures indicate, in
order to keep pace with
increases in costs, the July
1967 blend of $4.99 should
have increased 86 percent up
to $9.28 in July of this year.
Dairy farmers in the New
York-New Jersey market,
however, received $8.33 or 95
cents less than was
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necessary to cover Increased (bottled) price to the
costs of production. proportion of milk used for
If the prices paid index class I purposes in a market
continues to rise at its and the wholesale price
present rate, it will reach index for all commodities,
about 190 by October. Ap- This was the computing
plying this index to the method used prior to the
October 1967 New York-New Minnestoa-Wlsconsin pricing
Jersey blend of $5.64 would series now in effect.
yield a price of $10.72. In- York added that Eastern
stead, however, New York- had proposed a bill in
New Jersey market dairy Congress which would ac
farmers can expcet a blend complish the above result
price of only about $9.56 in and provides for use of such
October, $1.13 over last year, economic factors to reflect
but still more than $l.lO less general economic con
than increases in costs since ditions, consumers’ ability to
1967. . pay and producers’ change
Similar cost price in costs of production, as
relationships are evident in well as a supply-demand
other Federal order markets adjustment factor. He
in the Northeast. In general, strongly urged the bill’s
prices in the northeastern enactment.
markets for the first six
months of 1975 have
averaged 8% percent below
1974, while costs have
averaged HVz percent
highers.”
The dairy leader urged re
introduction of an economic
milk pricing formula which
would relate the Class I
A. B. C. GROFF, INC.
New Holland 35+4191
According to York, the
current squeeze between
prices paid and prices
received is improverishing
dairy farmers, and causing
many to abandon farming to
the ultimate detriment of
consumers of milk and dairy
products.
York stressed that milk
producers are large users of
oil and oil products in their
operations. In light of
rapidly rising fuel costs,
York proposed that milk
producers be exempt from
import fees of $2.00 a barrel
on crude oil and from base
fees of $.60 to $.63 on finished
product.
Unless dairymen can
recover their inflated costs
caused by higher oil prices,
dairy fanning in this part of
the country would
deteriorate to the point of no
return, and consumer prices
would zoom out-of-sight,
observed York.
York said the milk support
price, historically an
nounced by the U.S.
Secretary of Agriculture
once a year at the end on
March, should be recom
puted at least twice a year.
He charged that it is an in
justice to hold prices
producers receive at the
same price for twelve
months when, during the
same period, prices of things
producers buy rise
dramatically.
This year’s wheat export
deals including the recent
sales of ten million tons of
grain to Russia could
boomerang, causing
skyrocketing feed costs to
America’s farmers, York
noted. Eastern Milk
Producers will continue its
efforts in monitoring grain
exports and urging Congress
to keep vigil on adequate
grain storage supplies.
Farmers cannot stand
unrealistically high feed
costs in the Northeast again
this winter, concluded York.
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ilamsonbuig \a
Lancaster Farming, Saturday, September 20,197&
President Ford
calls for grain
export stability
WASHINGTON President Ford has taken notice that
the Soviet Union’s grain purchases have been highly
erratic in recent years and their effect has therefore been
a condition of uncertainty for the American farmer and
other segments of our economy.
In a statement released by the White House Press
Secretary last week, the President cited the following
table and made the remarks which follow it
Years Feed Grains Wheat
(in millions of metric tons)
2.8 0.0
1971-72
1972- 4.2 9-5 13.7
1973- 3.4 2.7 6.1
1974- .8 1.0 1.8
1975- (to date) 5.8 4.4 10.2
The considerable variation in large bulk purchases by a
single state trading company contrasts with the more
steady purchases of these grains by such customers as
commercial enterprises in Japan and Western Europe.-
Because these purchases are highly variable and un
certain, American farmers have not been able to count on
this market in their planting intentions to the extent they
have on other foreign purchasers. Moreover, highly
volatile and unpredictable purchases emerging after the
crop planting tend to contribute to price instability.
It would contribute materially to the interests of the
American farmer, workers in the transportation in
dustries and American consumers, as well as be in the
interests of our customers abroad, if we could develop a
longer-term and more certain purchase understanding
with the Soviet Union, providing among other features for
certain minimum purchases.
It will take some time to explore the possibilities of a
long-term agreement. The country must have a new
procedure for the sale of feed grains and wheat to such a
large state purchaser as the Societ Union. I am sending
representatives to the Soviet Union at once. I am also
establishing a Food Committee of the Economic Policy
Board-National Security Council in my office to monitor
these developments.
We have already sold a volume of wheat and feed grains
which will take four to six months to ship at maximum
rates of transportation operations. Accordingly, there is
no immediate necessity to decide about further future
sales at this time, and I am extending the present
moratorium on sales to the Soviet Union until mid-October
when additional information on world supplies and
demands is available. This extended period should
provide the opportunity to negotiate for a long-term
agreement with the Soviet Union.
Under these circumstances, I am requesting the
longshoremen to resume voluntarily the shipping of
American grain while these discussions go forward, and
the matter can be reassessed in the middle of October.
It will be necessary to complete the negotiations over
shipping rates in order to make it possible for American
ships to carry wheat and to assure that at least one-third
of the tonnage is carried in American ships, as provided
by the agreement with the Soviet Union which expires on
December 31, 1975, which is also under renegotiation.
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