EB—Lancaster Farming, Saturday, March 21,1981
The Milk
Check
TOM JURGHAX
County Agent
SPOTLIGHT
Maybe I’m sensitive, but from
all the publicity in the news media,
it seems like everyone in the
country knows about the dairy
price support program. And what
they have heard has not been good
they believe.
Fortunately or unfortunately the
way things turned out, dairy price
supports captured the spotlight
with Senate Bill 509 which would
eliminate the April 1 adjustment in
the dairy support price.
Hearings were held on the bill by
the Senate Agriculture Committee
on February 25, and it was
reported out of committee by a 14
to 2 vote on March 4. It will be on
the floor of the Senate the following
week before it goes to the House.
There’s a long way to go before
Franklin Co. DHIA
(Continued from Page E 7)
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DEALER INQUIRIES INVITED
passage. But, because it was the
first piece of legislation introduced
as part of the administration’s
“Program for Economic
Recovery”, it became a bellwether
that was to provide the first clues
to Congressional reaction to the
President’s demands.
The most often repeated com
ments were that, without the April
1 adjustment, the government
would save $l4B million dollars.
But, with it, consumers would pay
eight cents a gallon more for milk.
While I’m writing this, I’m
listening to a young lady telling her
radio audience storage costs for
surplus dairy products are costing
taxpayers $500,000 a day; that the
cost of the program last year was
$2 to $3 billion; that there are
excessive storage losses due to
8 8 305 21,673
3 5 305 19,236
6 1 305 21 152
6 5 305 24,599
4 9 305 21,969
spoilage; and all of this to keep the
farmers’ milk price above the
support price She didn’t say that
all of those dairy products now in
storage would be sold in the future
to reduce the cost of the program
and become a lid on milk prices
Certainly there is some truth in
many of the news releases, but
distortion and “slanting” can be
found in nearly ail of them.
Unfortunately, farmers them
selves have not made an effort to
sort the chaff from the wheat.
When non-farm friends or even
the local TV reporters ask
questions-it gives the impression
that even among producers it’s all
right to do whatever the ad
ministration wants to do to dairy
price supports.
I’m certainly not against
economic recovery. And if
everyone has to give up something
to achieve it, we will
But 1 think you ought to be
making it clear that you too are
giving up something and how
much and that what you’re
giving up needs to be considered in
the future when other programs
are realigned.
That eight cents a gallon comes
from assuming a 90 cent mcrease
in Class I prices if you get the April
1 adjustment in the support price.
There are 46 5 quarts in a hun
dred pounds of milk So 90 cents
divided by 46 5 gives you about two
cents a quart or eight cents a
gallon.
It doesn’t quite work out that
way in practice (which we’ll get
into later). But assuming it did,
you could take that same 90 cents a
hundred and show that you are
giving up $2700 in the next six
months if you don’t get it.
The average producer in Order 2
shipped 1642 pounds of milk a day
last year. At 90 cents a hundred, he
will give up nearly $l5 a day or $450
a month or $2700 in six months.
This “sacrifice” can continue
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HORSE TRADING
into the next marketing year,
starting October 1, depending on
what the new farm bill provides.
If you’re giving up that much for
the sake of economic recovery,
then you should be in a good
position for some horse trading in
writing the new farm bill.
It will probably reduce the
minimum price support level to 75
percent of parity whether or not
you get the April 1 adjustment
which depends on Senate Bill 509
passing both houses of Congress
before the end of March.
Some things you might consider
in your horse trading are such
important issues in the dairy in
dustry as quotas on (or elimination
of) casern unports. It’s interesting
that in that 14 to 2 vote on SB 509 m
the Senate Agriculture Committee,
the two votes against were from
Senators who wanted to include
elimination of casern imports in
that bill. The vote for amendment
was 8 to 8 so you have some sup
port right on the committee.
You could do more horse trading
with legislation on labeling
imitation dairy products so con
sumers would know for sure what
they’re buying.
Then there are those CNI
proposals still kicking around the
USDA that could be laid to rest for
good.
And how about recent decisions
allowing soft drinks to be served in
school lunch programs to replace
milk’
And, of course, the new dairy
price support legislation. If you
have to go back to 75 percent of
parity, at least let’s get some
changes made m setting the butter,
powder and cheese prices so they
will accurately reflect 75 percent
in the manufacturing milk prices
rather than what you’ve had since
October, 1979.
And, if vou’re really in a horst
trading mood, why not consider an
economic formula for pricing milk
At LANCASTER FARMING, we think we
do a good job of keeping you in
formed...and we have over 39,000 paid
subscribers who think so too!
in the support program? If you
have the bugs worked out there you
might even put it in your Federal
Order program.
STAY ALERT-STAY ALIVE
These are busy tunes in the milk
marketing arena, and you’ll have
to stay alert to keep on top of all the
developing situations that affect
the entire industry.
Some producers are feeling the
shifts more seriously than others,
but it’s touching everyone. With
the usual spring house cleaning
among Order 2 handlers, some
farmers are more concerned with
changing markets for their milk
than following the legislative
scene.
However, SB 509 will be followed
closely by the news media for
reasons already mentioned.
Even before the Senate
Agriculture Committee moved it to
the floor, they had started hearings
on the 1981 Farm Bill. They’ve
already worked their way through
wheat, corn, cotton, sugar,
soybeans and peanuts and on
March 11 it will be dairy’s turn.
It will be only the first shot heard
‘round the dairy industry and
many people will have different
ideas on what is the best program
for the most people.
1 just hope you don’t take the
attitude that everything has
already been decided and there’s
no use trying to get what you feel is
best for you. You’ll have to keep
both eyes and ears on Washington
while you’re keeping your nose to
the grindstone, your shoulder to
the wheel and your feet on the
ground.
And if you find it hard to milk in
that position, just remember
you’re on the Reagan road to
economic recovery.