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PENNSYLVANIA STAT 6
UNIVERSITY PARK PR
VOL. 30 No. 40
Block hits Congress on Farm Bill progress
BY JAMES H. EVERHART
WASHINGTON Agriculture
Secretary John Block has thrown
down the gauntlet to Congress, and
promised not to accept interim
measures if the legislators fail to
pass a farm program by the time
current legislation expires Oct. 1.
"Why keep something that is
losing markets for farmers,
driving up food costs without really
addressing the problem’” Block
said in a telephone news con
lerence with agriculture editors
this week
Block listed a number of
provisions in the "working ver
sions” of the House and Senate
bills that were not acceptable to
the Administration. Right at the
top of the list was the dairy title
passed by the House Agriculture
Committee:
"The House dairy diversion
program is unacceptable It would
impose a cruel compulsory
assessment, a tax on dairymen
that would take $1 billion to $2
billion out of dairy farmers’
pockets.
It would incur surpluses
through higher price supports,
going up to around $l3, it appears,
by the year 1990. And it would
distort relationships between
areas of the country.
“It would cost the taxpayers $1
billion a year, and, within five
years, it would raise consumer
milk prices 18 cents a gallon,
cheese prices by 36 cents a pound,
and butter by 31 cents a pound.
Experts paint gloomy picture at dairy outlook meeting
BY JAMES H. EVERHART
LANCASTER Lower prices.
Increased competition for the
consumer’s food dollar. Surpluses
for the foreseeable future. New
production-boosting technology.
The laundry list of potential
problems for the dairy industry
seems long indeed.
And the likelihood of immediate
improvement in any of those areas
seems remote, a panel of experts
told about 200 dairymen this week
at the second of two “dairy
outlook” meetings in Lancaster
The meeting was sponsored by
I’enn State Extension Service;
Dairymen, Inc.; Eastern Milk
Producers; Inter-State Milk
Producers; Kreider Dairy Farms;
and Lehigh Valley Farmers.
Unfortunately it provided little
good news .. and a lot of bad.
Summarized Penn State
professor Jack Kirkland, "some
people are going to go out of
business.”
The reasons for the gloomy
outlook are virtually the same as
they’ve been for about six months.
But the increasing likelihood of a
tough new dairy policy and the
growing gap between production
and “commercial disappearance”
means the situation is rapidly
reaching the critical stage
Inter-State economist James
f'raher lead off the discussion by
citing the statistics. Production, he
Said, has jumped back quickly
from the slightly lowered levels of
Four Sections
Block said he found the Senate
version, on the other hand, much
easier to live with.
“The Administration likes the
form, direction and design of the
Senate plan,” said Block
"However, in the Senate plan, to
really get the job done, there
Western Holstein Championship
Ed Doeberiener's Leadfield Telstar Linda-ET captured the grand championship of the
Western Pennsylvania Championship Holstein Show. For the story and results turn to
page A2O.
the dairy diversion program.
Milk output in May, for instance,
was higher than any May on
record, and production was
the greatest since 1947.
In the current year, he noted, it
is estimated that the federal
government i will purchase 11
billion pounds of milk equivalent,
fully seven percent of US
production
The large ’purchases, and the
large amount of uncommitted
inventory the federal government
now holds, will have “quite a
negative impact on prices,” he
said
Politically, added Eastern
economist Joseph Mathis, the huge
jump in production has hurt the
cause of dairymen as the U.S.
Congress debates the dairy policy
sections of the 1985 Farm Bill.
Currently, Mathis noted, the
House and Senate versions of the
Farm Bill take separate ap
proaches in their dairy titles. The
House version, he said, keeps
prices at a constant level, while
creating incentives to curtail
production.
The Senate Bill, on the other
hand, would employ a drop in
prices to reduce production.
Neither is really good news for
the dairy industry Though the
House Bill would maintain prices,
it would fund a stand-by diversion
plan and excessive government
purchases with a producer
assessment.
Lancaster Farming Saturday, August 10,1985
should be a cut in price support in
1986.
“To waste the whole year of 1986
and do nothing, when we’re
spending $2 billion a year taking on
product, is really unacceptable So
we need a cut in 'B6, but the way
they’re doing it makes sense ’’
So farmers looking for more
money in their milk checks will
have a long wait indeed.
Neither proposal will pass as is,
Mathis noted, and both will un
dergo substantial compromise
before have a chance to be enac
ted. A compromise proposal
drafted by Rep. Jim Jeffords,
senior Republican on the House
Agriculture Committee, has some
potential, he said.
The Jeffords bill, he explained,
would freeze the current price for
two years, then allow some price
adjustment in 1988. It would also
create a whole-herd buyout
Ag output in 1984 sets Lancaster record
LANCASTER Lancaster
County had a record year of
agricultural production in 1984,
despite problems with avian in
fluenza, pseudorabies and low
prices.
The value of ag products
produced in the county rose to
$709,644,680, or about $126,000 more
than the previous record, set in
1981, and $lB million more than the
output in drought-stricken 1983.
All of the increase in 1984
resulted from an outstanding yield
in crops, especially corn, which
averaged a phenomenal 130
bushels per acre throughout the
county, according to county Ex
tention Director Jay W Irwin.
The complete farm package
under consideration in the House
and Senate, Block said, would cost
more than $5O billion over the next
three years.
“Those are budget-busting
figures, exceeding the $35 billion in
the budget resolution sub-
program and provide
discretionary diversion authority.
The only positive factor the dairy
industry has on its side at the tune,
Mathis said, is Congress’ reluc
tance to take more stringent
measures at the height of the
overall crisis in farming.
Pat Wolff, a legislative aide for
the Pennsylvania Farmers
Association, added that the failure
of both House and Senate to meet
budget guidelines for the
agriculture package means
“everything’s going to be up for
discussion again.”
Ms. Wolff, who admitted that the
“The record crop year is what
made it,” Irwin said. “I’m not sure
we can surpass it this year.”
Production in the county’s No. 1
farm industry, dairying, was off
slightly in 1984, an apparent
reflection of the political and
economic forces at work to curb
the large dairy surpluses
nationwide.
Value of dairy products in 1984
was $211,347,000, down about
$488,000 from 1983 and $432,000
from 1982. Cow numbers and
production per cow remained
almost identical to pi evious years,
said Irwin, adding that the drop in
sales was caused mostly by the 50-
cent assessment to finance the
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17.50 per Year
stantially.”
Block did credit the work of
Senators Robert Dole and Jesse
Helms, and Congressman Kika de
la Garza in attempting to resolve
the impasse over farm policy
The USDA secretary also said
the adminstration would not ac
cept mandatory controls on
production, or the fashionable
marketing loan concept that has
caught the fancy of many on
Capitol Hill.
The budget exposure would be
tremendous with a program that
would allow farmers to take out
loans at one price and pay off the
loan at the market price,” Block
said “Marketing loan programs
effectively tend to funnel all the
gram through the loan program
That's not a good idea either, if
we're trying to move government
away ”
Block also said the Ad
ministration would not accept
price supports based on a cost of
production formula.
“Everyone says, ‘well that
makes sense, why not 9 ’
Everyone’s cost of production is
different Costs between regions,
for instance. And in this type of
program, supports are based on
the higher range of costs, which
would encourage surpluses.
“We need to price our products
to sell. Price them with the
market, not with some economist’s
plan figuring out cost of produc
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American Farm Bureau feels
more closely aligned to the
Senate’s version, commented that
the proposed diversion package in
the House bill ‘ ‘shifts the cost of the
program to producers."
The Farm Bureau (of which
PFA is a member) has estimated
that the various provisions of the
bill could result in an assessment
of more that $1 and closer to
$1.50.
Earl Fink, executive vice
president of the Pennsylvania
Association of Milk Dealers, said
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national dairy diversion program.
Even the county’s poultry in
dustry, hard hit by avian influenza,
remained the largest in the state.
Though the production of broilers,
for instance, was down 4.3 million
to 39.6 million, the value of the
product increased more than $3
million to $53.6 million, apparently
reflecting a more favorable price
caused by the spread of the virus
layers and eggs also were up
more than $4 million in value, to
$102.4 million, even though units
were down more than a million to
6.4 million.
Cattle and hog production
continued to remain the best in the
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