06—Lancaster Farming, Saturday, February 27,1982
LANCASTER This time next month, we should know whether state dairy
farmers agreed to chip in a dime tor the proposed Milk Marketing Program.
Many of these farmers, if in agreement with their co-op, won’t have to vote but
instead just sit back and let their co-op cast one big bloc vote.
Although there is still one final referendum, hearing on March 12 in
Harrisburg, most of the co-ops have voiced their opinions and have given the
referendum either the red or green light.
-sr.
*°OOCEP»’COO*
“Delegates representing 3,200
members of Inter-State Milk
Producers’ Cooperative approved
a resolution supporting man
datory, statewide dairy ad
vertising and promotion at the
annual meeting in, November,”
said President Robert B. Mc-
Sparran.
The time is long overdue for
dairy farmers to pick up the slack
in dairy product marketing, Mc-
Sparran said. “After all, 70 percent
of the fluid market is held by
-private labels-store brands, and
you don’t see these companies
trying to boost milk sales,” he
insisted.
Dan Martin, vice president of
Inter-State and chairman of the
Federal Order 4 Advertising and
Promotion Agency Board, feels
more farmers support this
proposal than the two previous
referendums.
“The Pennsylvania Farmers
Association, the Pennsylvania
Grange and Eastern Milk
Producers Cooperative support the
current referendums, although
they did not endorse past
marketing proposals,” Martin
said.
“There is a lot of rhetoric about
generic versus brand ad
vertising,” commented Martin.
“Research conducted over the past
18 years has clearly indicated that
non-brand (generic) advertising
provides a significant return on
investment for the dairy farmer,”
he continued.
“It is important that dairy
farmers realize that monies
generated through this program
will be under the control of a 20-
person advisory board composed
of Pennsylvania dairy farmers,”
McSparran said.
"As currently drafted,’ the
program authorizes the Secretary
of Agriculture to approve only
programs recommended by the
slate advisory board. Although he
may veto a proposal, he cannot
initiate action without board ap
proval,” McSparran continued.
“These checks and balances
insure that the marketing program
remains producer-oriented,” he
finished.
“The mandatory provision may
prove to be good politics on the
Federal front,” Martin said.
“Stockpiling surplus dairy
products are a serious threat to the
future of any federal dairy
programs,” he said.
“Washington has to know that all
Hairy producers are aware of the
supply/demand unbalance and
that all dairymen are willing to do
something about the problem,” he
said. “The mandatory contribution
prevents free-riders while making
sure that everyone who contributes
to the problem becomes part of the
solution,” he concluded.
A nine million dollar program
sounds like a lot, Martin said, but
soft drink manufacturers spend a
million dollars a day advertising
their products. “It is time dairy did
a better job of meeting its com
petition,” he said. “The Penn
sylvania referendum is one step
toward this goal.”
Co-ops speak out for milkerendum
EASTERN
The Board of Directors of
Eastern Milk Producers recently
reversed the cooperative’s
historical position on milk
promotion programs in deciding to
bloc vote its Pennsylvnaia
membership in favor of a milk
referendum in that state.
Cooperative President, Stanley
Korona said, ‘ ’We are in a period of
extreme dairy surplus, and far
mers must help reverse the
trend.”
Faced with a Federal Farm Bill
that sets flat prices for the next
four years, and with a rising dairy
production pattern nationally.
Eastern’s Directors thought it time
farmers themselves commit to an
advertising program designed to
increase consumption. If con
sumption increased government
purchases may fall, and dairy
farmers themselves will have been
part of the solution.
With this in mind, the Board
announced its intention to bloc vote
approximately 1,700 members in
the Commonwealth, so long as
individual farmers have the right
to vote for themselves. The law
under which the referendum is
being conducted assures this in
dividual right to vote. Korona said,
“We support this referendum and
hope all dairy farmers voting
agree to make the committment."
“This and other promotion ef
forts by farmers will send a clear
signal to the Administration in
Washington that dairy farmers
have committed themselves to
help solve the problem,” said Earl
Forwood, Secretary of the Board.
The Board also noted that in
creased dairy consumption will
take pressure off the purchasing
responsibility of the Commodity
Credit Corporation (CCC), which
could contribute to- actual in
creases in the price support level
in the tuture. Although the most
recent Farm Bill sets essentially
flat milk prices, there are two
provisions related to levels of CCC
purchases that could increase
support prices to either 70 percent
or 75 percent parity in marketing
years through 1983.
• Eastern’s Board ot Directors
hopes its action will both support
promotion and increased con
sumption, while also raising the
possibility of higher support prices
in the years to come.
"We would like to go on record as
supporting the proposed Penn
sylvania Milk Promotion Order
and are encouraging our local
member cooperatives to bloc vote
m favor of the program,” said
NEDCO President Edward Mc-
Namara at a recent meeting of the
large, Syracuse-based dairy
cooperative.
NEDCO has had a policy
favoring dairy fanner supported
milk promotion since its in
corporation in 1965, he said.
“We, as a collective body,
strongly believe that the milk
promotion program being con
sidered in Pennsylvania, is in
agreement with our cooperative’s
objectives, in that it provides a
way ot. collecting a sum of money
that will finance an effective milk
Yeas and nays
promotion ana rcoearch program
in the Commonwealth,’' explained
McNamara.
McNamara also stated that he
does not consider the three-fourths
of one percent take out a “milk
tax” as some are calling it.
“How can you refer to an in
vestment in your livelihood as a
tax?” he questioned. "Fur
thermore, the cost'of the plan is
distributed evenly over all
producers,” he said. Next, Mc-
Namara noted that the rate of
deduction per hundredweight is
flexible so that it will move with
the price of milk in the three
primcpal federal order milk
markets.
“We agree too that the program
will and should be administered by
an Advisory Board, appointed by
Secretary Hallowed, from among
nominations provided by the
cooperatives,” he said.
McNamara added that there has
never been a greater need for milk
promotion and research than at the
present time. Milk production has
increased greatly in Pennsylvania
as it has throughout the country,
.outstripping consumer demand for
the increased supplies.
"The federal government,
through the Commodity Credit
Corporation, has been purchasing
large volumes of storable
products,” McNamara com
mented. “As a result, support
prices have not been increased.”
He went on to say that it the
dairy industry is to survive, it must
take constructive action on its own.
“One of the most important
areas is to increase milk and dairy
product consumption," he said.
"The proposed program for
Pennsylvania will provide an
excellent means by which we can
achieve this objective.”
ILehioji
panes
Alpheus L. Ruth
i am a Pennsylvama dairyman
and involved in a cooperative that
markets each month nearly 100
million pounds of milk. This milk
does not end up in government
storage. Most of it goes to con
sumers via supermarkets. 1 have a
real interest in the recently held
hearings on the Pennsylvama Milk
Referendum and have attended all
live of them to get a reading of
milk producers’ attitudes across
the stale.
I am not opposed to advertising.
In fact, 1 am very positive about it.
I am also positive about giving all
dairymen as much of their dollar
as possible. The farm economy is
at an all tune low right now. Every
dairymen has the right to all the
information as to the future costs
involved in . promotion. 1 am
wondering how many Penn
sylvania dairymen are aware of an
additional five cents per hun
dredweight that could come about
in a national referendum. 1 am not
too sure this is not what should
come first. We have a national
surplus problem not only in
Pennsylvania, but if we vote in the
Pennsylvania Referendum first,
we could very well end up with a
double assessment. Last year
Pennsylvama only produced about
8 billion pounds of milk and the
whole northeast about 20 billion. A
national referendum .would drown
the northeast votes if both of these
involve mandatory deductions. I
did not hear this mentioned at any
of the hearings the past week.
By now I am'sure you recognize
that I am not ui tavor ot generic
advertising. 1 have more reasons
than 1 can state in this letter. Let's
look at just a few; Milk today is in
fourth place. To what - soda, beer,
coffee? is milk behind-genencally
or is it behind because of the
strength of these products by their
brand names • Coke, Pepsi,
Budweiser, Maxwell House, and so
on. Recently 1 spent some tune
before the television tube'in my
travels.'l saw many commercials
but no generic ads, except for milk.
1 know of very few items that are
generic. When they are, the
prestigious mark of quality has in
most instances been lost. To me
generic advertising is like sending
a njan out to dig a ditch with a
shovel that has no handle.
The alternate plan I refer to is
that of a provision for a matching
fund program. (Prohibited in
Article V of the current proposal.)
If this matching funds concept
would be acceptable, the program
would not need 10 cents per hun
dredweight. Something less'would
yield the same amount of revenue.
The matching' of dealer/handler
funds with deductions from the
farmer would share the respon
sibility for delivering a good
product' and marketing it ef
fectively to the consumer.
1 believe that m using the method
above we could have a meaningful
and fair referendum passed in the
State of Pennsylvania. 1 am
confused that the people pushing
the generic concept feel that they
need all the revenue. Those of us
requesting a matching fund
program are not asking for all the
dollars. We only want a fair share,
so that our own current, successful
brand program is not stopped. We
feel it would be, if the referendum
were passed. We need all our
dairymen in out program.
milk
marketing
inc.
A dairy referendum designed to
double the existing expenditures
tor- dairy promotion within the
state is currently being supported
by Milk Marketing Inc. (MMI), the
regional dairy cooperative that
markets the milk produced by
1,200 dairymen in western Penn
sylvania, according to Andy'
Langmyer, Pittsburgh division
manager tor MMI.
“With the assurance from the
.United States Department ot
Agriculture (USDA; that they will
not initiate the termination of
existing Federal Order advertising
programs, MMi can now fully
support the proposed' Penn
sylvania Milk Marketing
Program,” testified Langmyer at'
the recently held public hearings.
"While MMI does not think dairy
farmers can advertise themselves
out of all their current over- „
production problems, we do teel
that the return on this investment
is more than worthwhile,” said
Langmyer.
Studies conducted by USDA,
Cornell Umversity and United
Dairy Industry Association
(.UDIAj, indicate that on an
average, dairymen receive a
return of $2.20 for each dollar in
vested.
"Since all milk producers gam
from better markets for their milk,
whether or not they individually
participate in the funding of these
programs, we support the idea that
if the majority of Pennsylvnaia
producers decide there should be a
milk marketing program all
producers must participate. Even
a producer who believes and
wishes to mvest in advertising
feels he is being'short changed if.
his neighbor gets the benefit of his
investment without an equal in
vestment on his 'neighbor’s part,”
explained Langmyer.
“The proposed provisions of the"
program allow for the theory that
the 'advertising dollars should
follow the milk to market’. Since
Pennsylvania is a surplus milk
producing state, it is particularly
important that this theory be
followed here. Much of this state’s
milk production must find markets
outside of Pennsylvnaia.
As an example, in December
■ 1981, MMI moved approximately
27 million pounds of its members'
milk produced in Pennsylvania
into Ohio in order to secure
markets for that milk. It is im
portant to Pennsylvania farmers
that all of these out-of-state
markets continue to provide a good
outlet for Pennsylvania milk,”
Langmyer reported.
MMI also recommended to the
Advisory Board and Secretary to
give serious consideration to
funding ongoing programs that
have been developed by dairy
farmers over a period of years.
/'While the Advisory Board andj
Secretary have the authority to
expend the funds without certain
limitations, MMI urged that
producer money not be wasted by
duplicating programs and
research currently being done.
Hi
Keith Eckel, PFA president and
a dairyman from Clarks Summit,
Lackawanna County, urged his
tellow dairymen to adopt the
proposed program during an
address to presidents of PFA’s
county associations. He also urged
the county leaders to commit
themselves toward working tor
passage ot the referendum in-their
area. ’ .
Eckel told county leaders,
"PFA represents more than 10,000
dairymen, and 1 speak in then
behalt because, our members
adopted policy. Policy contains
certain guidelines; 1. Farmers
must control, the program. 2.
Farmers must have control ot
funds. 3. Funds must be spend tor
milk promotion. 4. Funds should
also be used tor product and
market research. 5. A majority ot
farmer- voting must approve the
program ' A detimte termination
date ot ai active program must
be design ed‘. 7. Dairymen
wishing to an id or terminate the
program shot 1 have right ot
petition to do so.
"The proposed milk marketing
program includes every major
guideline : established by our
membership. Delegate action on
this matter was unanimous.
•‘A farmer advisory committee
will administer the program. The
Pennsylvania Agriculture
secretary can not 1 repeal —can
not initiate any program without
the advice-and consent of the
committee ot dairymen. I trust my
fellow dairymen to act in my best
interests and those of my-industry.
Don’t you?”
"Your ’Yes’ vole is a vote for a
profitable future for your dairy
business in Pennsylvania. 1 urge
each and every person m this room
to work actively fftr the enactment
of the Pennsylvania milk
marketing program, and most
importantly, 1 urge your personal
endorsement of this program.’’