Dairy surpluses
(Continued from Page 1)
milk has become severe and
will spell disaster if the
brakes aren’t put on, one
dairy official after another
points out. That’s especially
true if USDA grants another
support price increase on'
April 1 when the parity
adjustment becomes due. An
upward adjustment of 30
cents per hundredweight for
Class n milk is anticipated.
Few dairymen in this area
would welcome such a move,
realizing that High prices at
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this time would only add to
their future woes.
Although the dairy
business is pretty well off on
the farm right now, the
surplus could lead to an
economic backfiring in
months to come. A primary
reason for this concern is
that the Commodity Credit
Corporation is now pur
chasing seven per cent of all
the milk going to market.
Government stockpiles of
milk are at their highest
level since the 1960’s says
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Penn State’s agricultural
economist William F.
Johnstone. Others in the
industry are echoing his
concern.
This year, the U.S.
government will spend about
$BOO million to buy milk over
and above America’s needs.
That expense is at tax
payer’s expense and will
likely draw significant op
position once Congress
becomes aware of the
matter. That’s why dairy
officials are worried.
Henry Geisinger,
executive vice president of
the Pennsylvania
Association of Milk Dealers,
says that U.S. government
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purchases of milk this year
will be equivalent to all the
milk produced in Penn
sylvania this year.
Geisinger, who took part in
Lancaster County’s Dairy
Day program this week, told
a gathering of about 400
dairymen that “Production
for price looks very good
today, but it may not pay off
tomorrow.” He urges
dairymen to produce for the
demands of the market.
Surplus milk supplies have
already caused numerous
smaller dairies to cut off
some of their shippers. In
cluded among the dairies
which is cutting producers is
the Christiana Dairy of
Lancaster County.
A number of dairy
cooperatives are shaky too,
simply because they’re
faced with having to handle
too much milk and
struggling to get rid of it.
Only one dairy cooperative
in Pennsylvania is known to
not be complaining too much
about the surplus milk
supplies. Lehigh Valley
Cooperative Farmers of
Allentown is handling all of
its own milk plus dozens of
tanker loads from other
cooperatives. According to
John York, vice president
and public relations officer
for Lehigh, 45 per cent of all
the milk handled by Lehigh
comes from non-member
sources. The cooperative is
actively searching to in
crease its membership, and
boasts an increase of 120
members just since last
year. Toted membership,
according to York, now
stands at 750, and the goal is
to have 950 members by the
end of 1978. He made the
remarks during a meeting of
Lehigh members at New
Holland on Thursday.
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Lancaster Fanning, Saturday, March 11,1978
Lehigh has been so in
volved in its efforts to recruit
new members that it has
caused another cooperative,
Eastern Milk Producers, to
file papers in court to
prevent Lehigh from taking
Eastern members. The court
has since ruled in Eastern’s
favor, although Lehigh -of
ficials explain that they did
not encourage anyone to
break his contract with
Eastern. Spokesmen for both
cooperatives have indicated
that they have no intentions
of pursuing the matter in
court. Freeburn Love,
marketing spokesman for
Eastern, told Lancaster
Fanning last week that
Eastern could sue Lehigh for
$250,000 but will not do so. He
noted that some rumors had
indicated otherwise.
Love, and other Eastern
officials spoke at a district
meeting at Intercourse a
week ago. Expressing
concern over rising milk
supplies, the cooperative has
begun a system of deduc
tions from milk checks to
cover extra handling costs
and to build up reserve
funds. A five cents per
hundredweight deduction on
all members’ milk is ex
pected to raise between $5
and $7 million dollars during
the next five years. That
fund cannot be eroded by
current operating costs, said
Franklin Wagner, District 8
director for Eastern and a
Dauphin County dairyman.
Lester Jones, president of
Inter-State Milk Producers,
told his members on
Thursday that even in
creased advertising cam
paigns will not take care of
the glut on the market. He
made the comments during
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5>60 Pu'ton Street/PO Box 366/Buftalo New York 14240
a District meeting held south
of Lancaster. Details on that
meeting can be found in a
separate story beginning on
pagel.
“We have too much milk
and our promotion program
is not enough to take care of
it,” Jones said. Describing
himself as a strong believer
in promotion, Jones
remarked: “If we increase
consumption by one per cent
a year, that’s good - but with
production increasing by
seven per cent, it’s not
enough.”
Johnstone points out that
for many a dairyman in the
Northeast, the milk situation
boils down to his having a
reasonable price for his
product, but no market.
What’s more, the dairy
farmer’s options for finding
other marketing outlets are
fewer and fewer. In 1955,
Johnstone pointed out,
Lancaster County had 52
handlers, in 1971 there were
only 21, and since then the
number has dropped even
lower. A number of smaller
dairies are closing their
doors altogether, the Penn
Stater pointed out.
The marketing dilemma is
causing more and more
dairymen to turn to
cooperatives, which
guarantee markets to their
members. Some
cooperative, however, aren’t
accepting new members at
this time. Lehigh is actively
searching for new members,
and Eastern has announced
its membership rolls are
open. Some of the other
cooperatives are not ad
vertising for new members
at this time.
Johnstone also noted that
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MIXES.
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