D24~Lancaster Fanning, Saturday, September 10,1983
The Milk
Check
TOM JDBCHAK
County Agent
Nature’s Way
While Congress and the dairy
industry have been trying for two
years to bring milk production
back in line with consumption,
mother nature may provide the
solution within two months.
Already 15 counties in Penn
sylvania have applied for
emergency assistance claiming
losses of hay and com crops of |155
million. Most of this was in the
southern tier and central Penn
sylvania counties but is likely to
include many more before the crop
year ends. In addition, Secretary
of Agriculture John Block is
meeting with the governors of 26
states on September 2 in Chicago to
review the problem nationally and
explore the ideas for emergency
assistance that may be needed.
Right now, the only assistance
available is low interest Farmers’
Home Administration emergency
loans going now for eight per cent.
Most of the disaster assistance for
crop failures was shifted to the
Federal Crop Insurance Program
two years ago but here in Penn
sylvania only four per cent of the
com in the affected counties was
covered.
Of course, no one knows for sure
what the final effects will be from
the weather and the PBK. program
but best guesses now are pegging
feed prices for dairy farmers at a
25 per cent increase this fall and
winter. And, as you’ve heard in
this letter many times before, the
second greatest impact after milk
prices on milk production is food
costs. Fred Hughes, Penn State
University Extension farm
management specialist, figures
that such an expected rise in feed
costs plus the dollar drop in milk
prices could cut “income over feed
} 1983 OLEY VALLEY $
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%***^H^VWV******s
costs” by |2SO per cow. That’s hard
to take and a lot of dairymen, large
and small, will have to make some
major adjustments to survive. It is
estimated that the average in
Pennsylvania DHIA herds is
already up to one pound of grain
for 2.5 pounds of milk because of
favorable feed price-milk price
ratios m the past. That has
provided much of the reason for
our production increases that have
been consistent nationally over the
last 52 months.
Nature’s way of bring milk
production down may be more
painful than man made methods
but it may also be more effective.
It certainly eliminates the
wrangling between industry
groups, legislators and tax payers
but that will be no consolation in
the months ahead when many
producers will be struggling -
harder than ever - for survival.
Second 56 Cents
On Tuesday, August 23,
President Reagan vetoed Senate
Resolution 149 so the starting date
for the second 50 cent assessment
on all milk will be September 1
rather than October 1. This makes
the total deduction of one dollar on
all milk but maintains the support
price at $13.10 where it has been all
year. The difference between the
first and the second 50 cent
deduction is that the second one is
refundable to producers who
reduce their milk production 8.4
per cent below their base. As ex
plained in the last newsletter, the
base period is from October 1980 to
September 1962 and your base
production will be the average of
the two corresponding months for
each year. For September it will be
the average of September 1961 and
September 1962. Because Sep
tember is the last month of the
marketing year a separate refund
payment will be made for that
month to those who apply. After
that the refund payments will be
made after six months or the end of
March and a final adjusted
payment after the end of Sep
tember 1964.
You won’t be able to make ap
plication for the September 1963
refund until you get your milk
check in October. In the meantime,
however, you could be digging out
your milk check stubs for the base
period and deciding if you want to
participate in the program. If you
do, you will have to take the
initiative to apply for refunds
because this is one time, I believe,
that the county ASCS staff will not
be beating the bushes for par
ticipation. They already have your
money so it will be up to you to do
what’s necessary to get back the
second 50 cents.
60 Per Cent Savings
With the total assessment now at
a dollar a hundred the Commodity
Credit Corporation hopes to collect
|1.4 billion next year to offset two
thirds of the |2.1 billion cost of the
dairy price support program. That
would bring the cost down to about
1700 million compared to this
year's cost of nearly |3 billion. This
is the real attraction to Congress
and the administration but it all
hinges on how much participation
producers provide. These
predictions were made before the
full impact of increasing grain
prices hit the fan. It may be that
participation by farmers would be
involuntary because of higher
grain prices and lower milk prices
but either way the dairy price
support program should cost less
in 1964. Unless USDA resurrects
the old Emergency Livestock Feed
Program and sells gram at
bargain prices to producers in
disaster designated counties as
they did in the past.
Partkipatlon
Speaking of participation,
Friday, August 26, was the
deadline for sending claim forms
to the Pennsylvania Milk
Marketing Board for producers
owed money for milk shipped to
Shep’s Cheese Company and the
participation was close to 100 per
cent in this case even though it was
the third request made by the
PMMB. Compiling and auditing ail
the claims will take several weeks
before final figures will be
available on how many producers
and how much money is involved.
The information is needed not only
for the bankruptcy proceedings but
for any returns that may come to
producers from the Security Fund
or the Producers Settlement Fund.
Not quite as high is the par-
ticipation in the Ex Sheps’
Producers Committee which is
now up to about half of the Sheps
shippers and still growing. The
ESP Committee was organized
largely through the efforts of the
Pennsylvania Farmers Union and
the Pennsylvania Grange to
represent the producers at
bankruptcy proceedings and to
recover the money due for milk
shipments made after July 25 the
date the bankruptcy was filed.
They have already obtained "ex
officio” status mi the creditors
committee and expect to have a
full membership as more
producers participate. There’s still
time to join. Bill St urges of
Wellsboro is the chairman.
Thanks to Dairylea, Sheps
producers have the 28 days nor
mally provided under the law to
find new markets for their millc
and by August 31 when the
Dairylea pickups were discon
tinued ail suppliers found alter
native markets. Thanks again to
Dairylea for providing a cushion in
the crisis and another example of
co-ops rising to the occasion when
producers are threatened.
MILK
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