VOL. 30 No. 43 Promotion referendum expected to win big BY JAMES H. EVERHART 1 ANCASTER Dairy producers across the country apparently have voted over whelmingly in favor of continuing the present dairy promotion program. Though results of the national rrteiendum will not be officially announced by USDA until later this month, preliminary indications point to a margin of more than ten to-one in favor of passage. Officials of the various piomotion and producer groups wen reluctant to claim victory, and USDA was refusing to com ment until the official an nouncement. However, the sheer weight of \ nt's cast by the nation's dairy cooperatives appears to be more than enough to carry the day. Specifically, tallies indicate that 183 of the nation’s 185 dairy co-ops, representing more than 70 percent of the nation's producers, have \ oted in favor of the referendum. And though individual dairymen had the right to cast their own votes in opposition to the piomotion program, reports in dicate few took advantage of the opportunity Specifically, reports indicate that hardly any dairymen requested ballots from ASCS of fices. which were designated as the local headquarters for the leferendum vote. And unofficial souices indicated USDA had i eceived fewer than 10,000 votes by the Aug 20 deadline F \en if all the individual votes ■no cast in opposition to the pioinotion program, the reteiendum would still pass ovciwhelmingly The referendum, conducted Aug. 1-20, was the producers’ chance to imikate whether they are willing to continue paying the bills for the promotional activities State ’s first tobacco auction scheduled for Dec. 16 BY JACK HUBLEY 1 '.NCASTER With prices of most agricultural commodities in the doldrums, the tobacco market max turn out to be a bright spot on the horizon for Pennsylvania Wow its, come sale time later this Midi A( i ording to County i'Uuuos, the newly formed Penn s)lvama Tobacco Auction, Inc., e V J e ts to sign the requisite cor porate papers on Tuesday that "ouki bring a yearly tobacco •tuition to the state. 1 he state’s annual production of d bout 16 million pounds of tobacco 15 divided nearly equally between Maryland Type 32, used for cigarettes, and Pennsylvania Type usc ‘d in the cigar and chewing tobacco trade. About 80 percent of ‘he total is grown in Lancaster bounty Growers here, however, have fj evei had the benefit of having buyers compete for their product through an auction. Traditionally, Four Sections It was mandated by the Dairy and Tobacco Adjustment Act of 1983, which also created the existing promotion program and the 15-cent-a-hundredweight deduction that finances it. All producers a total of about 200,000 nationwide who shipped milk during April 1985 wer.e eligible to participate Dairy leaders and promotion Once again Tom McCauley's four-year-old Queen Star Sexy proved unbeatable at Lancaster County's Elizabethtown Fair. The young Elizabethtown exhibitor not only repeated last year’s win in the dairy show with Sexy, but also went on to win Supreme champion honors for the second year in a row. Pictured with McCauley is Virginia Groff of Groff's Meats Inc., sponsor of the supreme award. For complete Elizabethtown Fair results turn to pages A2l and 22. tobacco marketing in the state has been a one-on-one affair, with southern buyers coming to the state beginning in November, and negotiating with farmers on an individual basis. Grower dissatisfaction with this system manifested itself earlier this year when three meetings were held in Lancaster County to explore the possibility of starting an auction. The complaint registered by nearly all growers attending the meetings was substandard prices caused by what the farmers perceived as a lack of competition for their product. One grower, who requested to remain anonymous, estimated that last year’s crop of Type 32 averaged 90 cents a pound across all three grades, “bot toms”, "middles” -nd “tips” The giower alkged that, although many farmers received offers in the neighborhood of $l.lO on the farm, upon delivery, the buyer would often dock, or Lancaster Farming, Saturday, August 31,1985 kiiry officials won’t confirm it, but ... advocates mounted an impressive campaign to win the support of the producers in the all-important vote. In the first several months the dairy promotion program was in operation, the various dairy promotion groups spent ap proximately $197 million $B2 million of which was spent by the National Dairy Board. The best of the best penalize, the farmer based on what he determined to be improper grading or moisture content Marketing by auction would eliminate such abuses, said the grower, pointing to Maryland’s tobacco auctions as an example. Although Maryland-grown Type 32 is generally considered to be of no better quality than its Penn- Labor Day! Due to the Labor Day Holiday, the office of the Lancaster Farming will be closed on Monday, Sept. 2. Mailbox Market & Sales Register deadlines have been extended until Tuesday at 5 p.m. Have a nice holiday! Happy Those groups have used the money to sponsor a variety of national and local television, magazine, radio and billboard advertisements and point-of purchase displays. If the referendum had been defeated, the 15-cent assessment would have ended, and two promotion groups the National Dairy Board and the Pennsylvania sylvania-grown counterpart, Maryland tobacco averaged $1.45 over the block last year, or about 50 percent higher than the same variety grown here. “If we could just live with $1.25, we’d be happy,” said the grower Although Keystone State far mers could conceivably receive higher prices m Maryland, Maryland growers discourage Pennsylvania growers from at tending the Maryland sales, said the source. So if Pennsylvania growers can’t take their tobacco to existing auctions, they’re prepared to bring the auctions here. According to a Pennsylvania Tobacco Auction, Inc., spokesman, the season’s first sale is slated for 10 a.m., Dec 16, at an auction facility near In tercourse. The first sale will be open to Maryland Type 32 tobacco, with Type 41 going across the block after Christmas. Sales will take place every Monday, Wednesday and Friday until the entire year’s crop is sold. (7.50 per Year Dairy Promotion Board would have gone out of existence Prior to the program, much weaker voluntary promotion programs were in effect throughout most of the federal milk orders. However, most of ficials agreed that the individual efforts suffered because they lacked the central direction and planning provided by the National Dairy Board and its campaign. Of the 15 cents assessed, five cents is earmarked for the National Dairy Board. The remainder can be directed either to the National Dairy Board or to a local promotion agency. Though analysts disagreed on the specifics of their findings, most agreed that the promotion programs had increased sales and consumption of dairy products. Specifically, many had disagreed about the effectiveness of generic, or non-brand, ad vertising of the type created for the dairy promotion program They contended it was less likely to produce results than branded ads directed at promoting a specific product. To counter that criticism, the promotion agencies recently coupled their own generic programs with brand-oriented campaigns launched by individual manufacturers of dairy products, especially ice cream and cheese As one expert noted during an informational program in Lan caster just prior to the referen dum, passage of the program should allow the industry, 'to find out once (and maybe for all) whether and to what degree ad vertising of dairy products does pay.” The spokesman noted that growers will be required to pay two cents per pound to enter their crop, and all tobacco will be displayed on 1,000-pound skids for the buyers’ inspection. Growers will watch their tobacco being sold, and will then have 30 minutes to accept or reject the final bid. If a seller is dissatisfied with the top bid, he will be permitted to offer his tobacco for sale for three sale days at no extra charge. One Leola-area tobacco farmer involved in the auction’s formation noted that a number of southern buyers have indicated that they plan to buy tobacco through this year’s auction. ‘Everything looks packaged,” he said, explaining that the signing of the necessary documents, and acquisition of the auction house is expected to go smoothly at Tuesday night’s meeting. Lancaster Farming will provide further information on Penn sylvania’s first tobacco auction in next week’s edition.
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