A26—Lancaster Farming, Saturday, January 28,1984
Too many rules
BY ROBIN PHILLIPS
Staff Correspondent
LEESPORT There was much
whispering and many opinions
voiced as dairymen gathered at
the Berks County Ag Center on
Wednesday, January 18, for the
Berks-Montgomery County
Meeting. In spite of the threatening
snowstorm, more than 75 farmers
attended to get the latest update on
the milk diversion program,
federal crop insurance, and the
1984 wheat and feed grains
programs.
Dairymen waited with ominous
anticipation for the explanations
on the new milk diversion
program. Having been handed the
ten pages of rules and definitions of
the program when they entered the
auditorium, they were ready with
many questions and comments.
Richard A. Pennay, program
specialist with the state ASCS
office, explained the entire
program. Harry Schaffer,
Cooperative Extension Service,
addressed the economics of
reducing milk production. Also on
hand to field questions on the
diversion program were Warren
Lamm, executive director of the
House Agricultural Committee;
Alpheus Ruth, President of Lehigh
Valley Cooperative Farmers; and
Henry Bohn, Berks County ASCS
Office.
“For you dairymen, this is a
brand new deal. Nobody ever told
you to go out and sell half your
herd before,” Pennay stated.
Citing the diversion program as a
major compromise to make price
supports effective in providing
reasonable dairy income while
providing adequate milk supplies,
Pennay spoke in favor of large
participation. Pennay compared
this program to the PIK program
which cut down the corn surplus in
Cumberland Co-op meets today
SHIPPENSBURG - The 54th
innual meeting of the Cumberland
/alley Cooperative will be held
oday at the Shippensburg Area
Senior High School.
The meeting will open with a
uncheon to which farm families
vho are patrons of the Cooperative
ire invited.
The formal meeting starts at 1
p.m. Officers will report on the
progress of the Cooperative.
James A. Bear, Sales Manager will
Show slides telling of “CVC-The
local Service Cooperative in
Cumberland and Franklin counties
is well as Adams, Perry, Fulton
md Huntingdon Counties.”
Officers of the Cooperative in
dude Garnet B. Dice, Cham
oersburg, president; Wayne F.
Craig, Shippensburg, vice
iresident; Donald E. Hawk,
Shippensburg, secretary-treasur
jr; Harry A. Mohn, Newburg,
Member of the Executive Com
nittee; and Merrill R. Bivens, St.
rhomas who is chairman of the
ward.
The Board of Directors have
lamed Henry A. Zajac as General
Brooks End sale averages $305
BEAVERTOWN - Brooks End
and Par Kay Farms, Beavertown,
held their annual winter sale last
week. The auctioneer was Mike
Jones, LaGrange, Ga. The sale
totaled $75,685 for an average of
$305.00 for the 248 head.
The top-selling animal was Lot
31 RTB3 Kami 24-2, a Yorkshire
Bred Gilt selling for $l,lOO to Kelly
Crompton Evanston, Wy. The top
selling Yorkshire Board was Lot
105 purchased by Delmarva Farms
Selfville, Del. for $6OO. The top
selling Landrace Bred Gilt was Lot
88 purchased by Sam Lane Dover,
Alpheus Ruth, president of
Lehigh Valley Cooperative
Farmers, told Berks-
Montgomery meeting that he
does not believe that 15-cent
national deduction for ad
vertising will help very much.
He believes that increased
advertising is needed on the
co-op level.
one year. “The approach is to cut
down cows,” he explained. “By not
reducing, alot of you will be putting
milk to that milk company for two
bucks a hundredweight. Can you
produce it for that’” Pennay asked
the dairymen.
“We need strong participation in
this program. It’s designed as a
self help program for dairymen,”
Pennay continued. “It will cut
dairy surplus and preserve the
integrity of the price support
program.”
ijac
Manager of the Cooperative. He
succeeds Wayne D. Baker who will
•emain with the organization in
mother capacity.
Zajac comes to Cumberland
/alley Cooperative with 35 years
ixperience in all phases of farmer
•ooperative work.
N.C. for $440. The top-selhong
Landrace Board was Lot 167
purchased by Isaac Ray Sensenig
Ephrata, for $460.
A total of 45 head of Yorkshire
Bred Gilts averaged $379; 51 head
of Yorkshire Boars, $419; 96 head
of Yorkshires, $4OO ; 40 head of
Landrace Bred Gilts, $321; 9 head
of Landrace, $326; and 103 head of
Landrace, $326; and 103 head of
Commercial Open Gilts $207.
This sale offering sold into eight
different states. Much of this sale
offering featured imported
bloodlines
in milk diversion program
The milk diversion program has
a deadline for signing up of Jan. 31.
“We’re on a very tight time
schedule,” Pennay admitted, as he
urged dairymen to consider the
advantages of this program.
What attending dairymen did not
appreciate about the program
were the ten pages of rides and
guidelines for compliance in order
to receive the diversion payments.
“What happens to our order 4
base?”
“Can we sell breeding stock?”
“What if I’m renting the farm to
someone else?”
“How much are those cows going
to cost to replace?”
“What if the government
changes the program after I’ve
sold one-third of my herd?”
These were the questions asked
by the dairymen as their major
concerns with the program sur
faced.
Under the guidelines of the
program, reduction must be
between 5 and 30 per cent. “It does
represent a large reduction in
dairy income,” Pennay admitted.
However, “it is a big bucks
program,” he stated referring to
the large diversion payments
possible.
Harry Schaffer advocated
participating for the 30% reduc
tion. “If it pays to reduce total
production, then take the
maximum,” he advised. “The
more diversion you sign up for, the
more it will pay you.” With a $lO.OO
per hundredweight payment for
contracted reductions, diversion
payments could represent
thousands of dollars.
Schaffer outlined different
stategies for reducing milk
production. Many farmers agreed
that the program looked very good
on paper in the hypothetical
situations that Schaffer presented.
“The best strategy in the short run,
is to cull cows rather than lower
production,” Schaffer advised. He
did caution farmers to monitor
their cash flow closely since
diversion payments will be paid
quarterly. “Work it out for your
situation,” he urged.
“It looks good on paper,”
Alpheus Ruth, president of Lehigh
Valley Cooperative Farmers,
stated. Ruth cautioned dairymen
to view the program as a 27-month
program, not as a 15-month
program.
“If you reduce your production,
your order 4 base is going to be
reduced,” he verified. This base
will be used in pricing a producer’s
milk for the following year. A
dairyman will feel the effects of
any reduction for a year after the
program concludes with this
pricing system. Ruth urged far
mers to consider this when looking
at the program. He also reminded
them to consider what
replacement animals are going to
cost at the end of the program
“when your banker says you need
more cows.”
Discussing current farm programs at Berks-Montgomery meeting are, from the left,
Jim Smith, district director for federal crop insurance; Richard Pennay, of State ASCS
Office; Harry Schaeffer, of Extension Service; and Henry Bohn.
“I’m a strong cooperative man,”
Ruth went on to say, “but
cooperatives have done a very
poor job of marketing milk.” Ruth
spoke in favor of utilizing in
dependent experts to advertise
milk. He said they do a better,
more efficient job. “We are never
going to be relieved of the job of
marketing milk,” Ruth stated. “I
don’t believe thuat the 15 cents is
going to do too much.”
Donald Duncan, president of the
Berks County Dairy Farmers
Association, was also in favor of
better advertising campaigns.
“We farmers must stand up and
tell the American people that we’re
giving them a cheap, but excellent
product,” Duncan stated. Some
dairymen took Duncan’s viewpoint
on this “ridiculously, complex
program” and agreed that a much
simpler but yet effective program
could have been used.
Although the program leaves the
methods of reduction up to the
dairyman, there are many
guidelines that must be followed or
paybacks and penalties will be
imposed. Of major concern are the
permitted ways to cull cows. To
reduce cow numbers, cows may be
sold to slaughterhouses, to another
producer under contract, or
overseas. There are no exceptions
or waivers to this rule. This
prohibits any consignment selling,
any selling of breeding stock, and
any selling of heifers over 9 months
of age as of November 8,1983, to a
producer not under contract for the
diversion program. “When you sell
an animal, you better know where
she’s going,” Pennay warned.
Another area of concern to many
older dairymen was if the principal
operator under contract died, the
contract would still be in effect. It
would be up to the estate to either
continue within the diversion’s
guidelines, disperse to a
slaughterhouse, or sell to a
producer under contract.
“We only have two formal
contracts signed,” a Berks County
ASCS official confirmed It was
revealed that there are some
contract problems in multiple
operations or when a father
transfers a diary to his son.
To be eligible for the program,
you must be a producer on
November 29, 1983. This includes
individuals, partnerships, cor
porations, and anybody with a
financial interest m a dairy
production unit. Much of the
confusion comes in understanding
what consititutes a “dairy unit.”
“We have all different com
binations here,” Pennay stated. A
unit consists of a producer, a
facility, and a farm. Complications
arise when there is a landlord with
his own operation and also renting
a farm to a tenant. If one part of a
unit contracts, the rest of the unit
must also comply if they share the
same interests.
Dairymen also did not like the
4^
option in the contract for the
government to change the
program. If the reduction should
be shown to be excessive, the
Secretary of Agriculture has the
authority to slow down the rate of
culling. This option was
established to prevent shortages of
milk and substantial hardships to
producers of beef cattle, hogs, ro
poultry because of too much
culling of dairy animals.
However, if the surplus con
tinues, on July 1, 1984, if the CCC
purchases over 5 billion pounds,
the support price will drop to
$11.60. If the surplus is reduced
below 5 billion pounds, by July 1,
1985, the support price could be
raised 50 cents.
“Once they understand it, I
believe more people would enroll,”
Henry Bohn, Berks County ASCS,
stated. “It’s looking better than
what I had thought,” he replied.
The meeting seemed to answer
most of the questions and Bohn
revealed that his office has 22
producers establishing their bases
for the program.
Throughout the day Pennay
urged farmers to consider this
program. “We have never
sacrificed efficiency in order to
stabilize the market, that’s what
has made us the idols of the world’s
producers,” he told the dairymen.
He concluded the program with, “I
sure hope you take a good look at
it. It’s your industry.”
Jan Smith, district director for
the Federal Crop Insurance
Corporation was also available to
provide the latest information on
crop insurance. He urged farmers
to consider individual yield
coverage. “This gives a farmer the
chance to increase their
guarantees without increasing
their premiums,” Smith stated. To
qualify, farmers need at least
three years of verifiable
production and acreage, e.i.
weight slips, bin measurements, or
summary sheets. Crops covered
are wheat, barley, corn, grain
sorghum, oats, and soybeans.
New benefits to the program are
the late planting agreement option
and the replanting option. Only an
entire crop can be insured.
Farmers collected over
$90,000.00 in federal crop insurance
in Berks County last year ac
cording to Smith. Informing
yourself as to the coverages
available, the current rates, and
then filing your acreage report on
time can ease the effects of un
predictable weather, Smith
stressed.
Richard Pennay also discussed
the new PIK program for wheat.
‘‘The nice thing about PIK is, if you
own the commodity, you can take
advantage of the market price. It’s
up to you,’’ he stated. He also
explained the current con
servations programs available and
urged farmers to look into these
various programs to help them in
their particular operations.