B32—Lancaster Farming, Saturday, February 25,1984
The Milk
Check
TOM JURCHAK
County Agent
No Contract Changes
Last week the USDA released
enrollment information on the Milk
Diversion Program and concluded
that there would apparently be no
reason for modifying contracts. In
light of the number of farmers
enrolled; the amount of milk to be
diverted and the number of dairy
cows to be slaughtered because of
the program, no changes would be
made. However, farmers under
contract should receive, by cer
tified mail, a letter from ASCS
verifying acceptance of their
contract before it is official.
Total /enrollment for the nation
was 37,530 or about 12 percent of
the producers. They contracted to
reduce production below their base
by 9.3 billion pounds or 5.5 percent
of the national supply over the next
15 months. They would send 336,796
more cows to slaughter or about 60
percent above normal culling
between now and March 31, 1985.
This was the average for 15 months
but during the first quarter they
plan to send twice as many cows to
the butcher than they usually do
and in the last quarter only 30
percent more.
With only a 5.5 percent cut,
USDA does not see this as a threat
to fluid milk supplies in any
market. Neither do they feel that
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the extra cull cows will seriously
affect farm prices for meat.
Besides, they have other op
portunities for supporting meat
prices if needed. Such things as the
triggers already in place for
limiting beef imports and CCC
purchases of meat for school lunch
or other commodity programs.
At this level of participation, the
50 cent assessment started
December 1 to pay for the Milk
Diversion Program will about
cover the cost if there are no extras
for administration. Over the 15
month period ASCS will send about
$930 million, at the rate of $lO a
hundred, to the 37,530 farmers for
an average of $24,780 per farm for
reducing production an average of
23 percent below their base.
Regional Differences
There were big differences,
regionally, in participation but not
as some expected. Those who were
guessing, thought participation
would be light in the northeast and
midwest but heavy in the southeast
and southwest. It didn’t turn out
that way. Here in the northeast,
participation was below average
with Pennsylvania and New York
at six and eight percent, with
Vermont and New Hampshire at 12
and eight percent. The southeast,
southwest and California were
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about at the national average of 12
percent. The big surprise, if there
was one, was in the midwest and
the lake states. In the midwest,
Kansas, lowa and Nebraska
ranged from 18 to 22 percent
participation and the lake states of
Wisconsin, Minnesota and
Michigan - all big states in milk
production - had 14 to 20 percent
participation.
So, while it would appear that
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there is no threat to fluid milk
supplies nationally, local market
or individual handlers could have a
supply problem but milk probably
will not have to move long
distances to meet fluid needs. Milk
for processing, particularly butter,
powder, cheese and condensed
milk, will have to fill the gap for
fluid use and soft product
manufacturing and this is where
the shoe will pinch. Processing
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capacity expanded in recent years
to accomodate increased
production since 1979 may not have
the milk supply they have come to
expect. However, if we can use the
rule of thumb that the reduction in
supply will be about half the
percent of farmer participation
then the greatest reduction of milk
supply even in the midwest would
be about 10 percent. That could
(T urn to Page 833)
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