Al4—Lancaster Fanning, Saturday, October 11,1980
Letters To
The Editor
Dear Editor:
I read with interest the
story about Atlantic
Processing petitioning The
Pennsylvania Milk
Marketing Board to allow
milk prices to seek the level
dictated by the free market.
My family has been in the
milk business since 1912,
first as a farm-to-retail
operation and then (since
1936) as two separate
businesses: Woodson Farm,
a 50 cow registered Holstein
herd; and Woodson Dairy, a
small property handler of
milk. I have no direct
financial axe to grind in
Woodson Dairy, but I have
always felt loyal to the place
we ship our milk to, and I
naturally see things from the
point of view of a competitor
of Lehigh Valley.
At any rate, it is refreshing
to see Atlantic Processing
arguing for a free market. I
just wish they would take a
consistent attitude toward
the pricing of wholesale milk
under federal orders.
Several years ago
Woodson Dairy was reluc
tantly drawn into The
Federal Milk Marketing
Order because Lehigh
Valley, among others, said
that small property handlers
had an unfair competition
advantage over them
because a large portion of
Woodson Dairy’s sales were
fluid milk, Woodson Dairy
was able to pay its shippers a
lower price for that fluid
milk and still hold the blend
price to approximately what
the large co-ops were
paying. (Never mind the fact
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that nearly every other
competitive advantage that
comes from an economy of
scale was held by Lehigh
Valley).
In short, hearings were
held, Federal Registers
published, and Woodson
Dairy together with other
unwilling dairies, were in
cluded in The Federal Order.
The net effect of which is to
penalize Woodson Dairy for
selling to a large proportion
of its milk as a fluid.
To our way of thinking, if
is simply the tyranny of the
majority over the minority
and we see little hope that
our interests will ever find
an ear in the Federal
bureaucracy.
As far as Woodson Farm
goes, we no longer have any
financial reason to prefer
shipping to Woodson Dairy.
The price we get is dictated
by droves from Washington,
and it was little direct
relation to The Economics of
Red Hill, Pa. Instead, it is
the end result of a series of
calculations of production
costs in the upper midwest.
Nothing makes my blood
boil more than the frequent
letters we get from our
market administrator telling
us what a splendid break
they have achieved on our
behalf. Bargaining between
Woodson Dairy and Woodson
Farm has been replaced by
commands from the com
mission. I should add, too,
that the milk business has
not been made a big bonanza
because of federal tam
pering with our prices.
The only general ob-
servation I can make about Let Atlantic Processing
the price of milk under the make money any way they
government’s guidance is see fit> but leave the small
that it is continually just independent processors out
barely enough to keep us of an arrangement that
interested. The carrot on the seizes their profits for the
stick is not too big, but we sake of Atlantic’s cash flow,
think it may look bigger j would prefer the chaos
when we get up close. we suffered in miUc pricing
Federal orders serve the from 1912 until our inclusion
interests of large co-ops that jjj The Federal Order over
dispose of a large portion of the stability (in
their milk as a manufao distinguishable from the
hired product. They allow chaos) we now enjoy,
processors to acquire milk Roderick W. Wood
for cheese manufacturing at R 2 Pennsburg
a low price related to that of
fluid milk, and then the pool
(The “producer settlement
fluid”) forks over the money
they might have received for
selling fluid milk. Fluid milk
then becomes a problem
commodity for the large
processor, and he winds up
selling it for the least
possible price just to be rid
of it.
There is no other ex
planation for the ruthless
price competition engaged in
between Lehigh and
Daiiylea. They make their
profit in manufacturing and
only seek minimum margins
(or no margins at all) on the
fluid product.
The management of
Atlantic Processing is
therefore vocal about
PMMB rules that pertain to
their fluid prices, but
strangely silent about the
Socialist machinery of the
federal govemnment.
Small dairies can find a
niche as producers of high
quality products, and they
can overcome competition
from the cheap milk com*
petition; but they should not
be required to buy milk
according to a rigid set of
rules and then sell it in a
market dominated by a
competition that does not
care enough about
profitability.
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