A36-Lancasttr Farming, Saturday, July 20,1985
The Milk
Check
TOM JUBCHAK
County Agent
All but one of the provisions of
the Dairy and Tobacco Adjustment
Act of 1963 have been completed,
including support price ad
justments, Commodity Credit
Corporation purchases, a diversion
program and a mandatory
national milk promotion program.
The only one left before the
legislation expires on September
30 is a referendum of all producers
to decide if the promotion program
should be continued. All producers
shipping milk during April 1985 are
eligible to participate.
Cooperatives can bloc-vote their
membership but must also send
each of the members a ballot to use
if they want to vote contrary to
their co-op vote. Producers who
are not members of a cooperative
must pick up a ballot at their
county ASCS office and mail it
after August 1 and before August
20 in the postage-free envelope
provided.
If a majority of producers voting
are in favor of the promotion
program it will be continued.
Otherwise it will expire with the
rest of the Act in September. If it is
continued after September the
Secretary of Agriculture may
conduct another referendum at
anytime but must have one if
requested by a representative
group comprising at least 10 per
cent of all the producers.
Everything to date is on schedule
with all the bloc voting coops
mailing ballots to their members.
Lehigh Valley is the only major
coop in Pennsylvania not bloc
voting in favor of continuing*the
promotion program.
Proprietary handles have sent
informational leaflets provided by
USDA to their shippers notifying
them that they must pick up ballots
at the ASCS office if they want to
vote. They cannot be mailed to the
producer from the ASCS office.
Ballots have been available
since July 15 and must be mailed
between August 1 and August 20 to
the Agricultural Marketing Ser
vice of USDA. Only one vote per
farm unit is allowed. A toll-free
hotline is available for anyone who
has questions. The number is 1-800-
423-7206.
Not the First Time
This won’t be the first time for a
referendum on milk promotion in
Pennsylvania and everytime in the
past it has been defeated. The
reasons for defeat varied between
groups and individuals. In the past
some objected because it was
voluntary and some because it was
mandatory.
Some felt they couldn’t afford it
while others insisted it should
include brand advertising. Some
thought the dealers should pay for
it while others felt it would never
get done without the producers.
Some called it a milk tax while
others felt it was a contribution
toward salvation.
This time however it isn’t just
Pennsylvania producers who are
voting but Pennsylvania, and
every other state, will lose a lot of
promotional funds if it is defeated.
Nationally farmers are paying $l9B
million toward promotion and
advertising but only $B2 million of
that goes through the National
Dairy Promotion and Research
Board to be spent by the 36 farmer
members who hve been chosen by
their organization to sit on the
Board of Directors.
Every milk producer contributes
15 cents a hundred to the total
advertising and promotion
program but up to 10 cents of that
can be diverted to local programs.
That’s why the national board gets
only about 40 per cent of all the 15-
cent contributions.
Here in Pennsylvania and New
York we send even less than 40
percent to the national because
Federal Orders 2,4 and 36 all get 10
cents from most of the producers
in addition to $lOO,OOO going to the
Pennsylvania Dairy Promotion
Servics.
New York has a single statewide
program that is funded now from
the national collections. My point
is that most of the money from
your 15-cent contribution is now
going into local promotions that
would be curtailed or eliminated if
producers fail to approve the
national program.
Is It Worth It?
The National board was
organized a year ago in May and
their promotional programs were
started only eight months ago. In
that short time it’s hard to make
accurate evaluations of the ef
fectiveness of the promotion.
Surveys of consumer attitudes
toward the use of milk and dairy
products indicate real progress
toward increased consumption.
For instance, adults who said they
drink milk everyday increased
nine percent. Those who reported
using butter every day increased
30 percent. There are a lot more
examples like this indicating that
the program works in changing
consumer attitudes toward dairy
products.
However, it will take more time
and effort to get the hard,
economic impact of the promotions
but his has already been started. It
will be a first on a national scale
for a producer program but is
necessary to know how your funds
can be spent most effectively. This
evaluation program, already
started, will be one of the great
losses if the promotion program is
not continued for at least another
year to really get the answer to the
question “does dairy advertising
pay?”
Something Needed
Whether it’s a promotion
program or a price support
program dairy farmers need
something to keep prices up in face
of runaway produciton. It’s not just
increases in production over last
year but record high numbers
never seen before.
In May you produced more milk
nationally than ever before in a
single month. It was a five percent
increase over last May but Penn
sylvania went one better with six
percent and New York had four.
The increased production was
reflected in a Minnesota-Wisconsin
price of $11.20 in June that was 26
cents under May; a dollar less than
February; $1.50 below last
November and the lowest since
August 1979.
Worse than that it was even 11
cents under the support price. The
blend price for June in Order 2
dropped 31 cents below May to
$11.47 including another five cent
loss to the Producer Settlement
Fund for lack of a NEDCO
payment. The $11.47 blend price is
82 cents less than last year so how
come everyone is producing so
much more milk?
Dairy Marketing
One of the reasons is that 50-cent
assessment you were paying a
year ago but not now. That cuts the
difference in the farm price down
to only 32 cents less than last year.
’B4 Commodity programs cost $6.6 billion
WASHINGTON - The federal
government paid nearly $6.6 billion
in commodity program payments
in 1984 with 61 percent of that
amount going to the 95 percent of
the program participants who
received less than $25,000 each,
according to U.S. Department of
Agriculture figures.
Assistant Agriculture Secretary
Robert L. Thompson said only 5
percent of the payees under all 1984
Agricultural Stabilization and
Conservation Service programs
received more than $25,000, but
they accounted for 39 percent of
the total amount paid under the
programs.
He said the figures also show
that nearly 90 percent of all
program payments went to wheat,
feed grains, cotton, rice and dairy
producers; yet these commodities
accounted for only 31 percent of the
total cash receipts from farming in
1984.
Thompson said the program
payments were distributed as
follows:
Cotton-Eighty-eight percent of
the total cotton program payees
received less than $25,000 each and
accounted for 44 percent of the
total cotton deficiency payments,
while 12 percent of the payees
received more than $25,000 each
and received 56 percent of the
payments.
Rice-Similarly, 78 percent of the
nee program payees received less
than $25,000 and accounted for 35
percent of total rice deficiency
payments, while 22 percent
received over $25,000 each and
accounted for 65 percent of the
payments.
Wheat-Nearly 99 percent of the
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With feed prices falling almost as
fast as farm milk prices it’s ap
parent that most farmers feel it’s
profitable to produce more milk.
This is likely to continue until milk
wheat program payees received
less than $25,000, amounting to 85.5
percent of the total wheat
deficiency payments, while a little
over 1 percent of the payees
received more than $25,000,
totaling 14.5 percent of the
payments.
Com-And, similar to the wheat
figures, 98 percent of all com
program payees received less than
$25,000 and accounted for 84 per
cent of the total com deficiency
payments, while only 2 percent of
the payees received more than
$25,000 and accounted for 16 per
cent of the total payments.
Dairy-Seventy-five percent of
all milk program payees received
less than $25,000, totaling 38 per
cent of total payments; 25 percent
of all payees received more than
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prices drop faster or further than
feed prices; feed prices increase
for any reason; dairy product
consumption increases
dramatically; producers finance a
supply control program; Congress
provides a safety net for milk
producers in the next farm bill or a
combination of any or all of the
above.
|25,000 while accounting for 62
percent of total payments.
Wool-Over 99 percent of all wool
program payees received less than
$25,000 each and accounted for two
thirds of the total wool payments,
while less than 1 percent of the
payees received more than $25,000
each, amounting to one-third of all
the payments.
Thompson also said that 1983
USDA figures-the most recent
data available-show 72 percent of
all farms had annual sales of less
than $40,000 and received 22 per
cent of total government
payments, while the 12 percent
with sales of over $lOO,OOO received
45 percent of total government
payments.
Contact:
Monroe Stoltzfus
At
717-738-1515