/OL 31 No. 18
Signup begins Monday
’B6 Conservation Reserve may idle 82,000 acres
To account for regional differences in land rental rates, the state has been divided into
two bidding pools. Rates general average more than $3O per acre in Pool 1, less m Pool
2
What to bid on herd buyout?
BY JAMES H. EVERHART
LANCASTER Dairymen all
across the country are talking,
whispering and even mumbling to
themselves about the latest
wonder from Washington, the herd
buyout proposal.
A few are critical of the whole
idea. Some doubt that many far
mers will participate. And most
are very skeptical about the
program’s chances of success.
But virtually every dairyman is
wondering the same thing as the
program’s March 7 signup
deadline draws near: what’s a fair
bid? And what kind of bid will be
accepted?
Adding to their frustration is the
relatively tight-lipped approach
taken by extension agents and
other dairy experts. None of the
officials wants to be in a position of
telling a dairyman what to bid
especially when so much can go
wrong.
One thing is certain; Bid figures
quoted privately by experts have
climbed substantially since the
first estimates were circulated
after the 1985 Farm Bill was finally
cast in stone just before Christmas
last year.
At that time, many private
forecasters predicted bids would
be in the low teens, with the ac
ceptance level occurring around
$7-8 a hundredweight.
Now, however, all bets are
clearly off, as dairymen struggle
with the complexities of ac
counting systems and tax laws,
and grope for agricultural and off
the-farm sources of new income.
In fact, calculat'-ms for
dairymen in typica' nations,
when fully weighted . all con
tingencies, have been running
much higher than anticipated,
many as high as $4O to $45, dairy
experts said
Five Sections
The dairyman's $64,000 question:
And clearly, the stakes are much
higher.
John Brockett, the Penn State
Extension System’s business
expert and computer guru, has
devised a computer program that
prompts dairymen to provide a
whole range of figures, and
analyzes that data into a series of
bid information.
And in working with dairymen
around the state, he says, he’s
found a wide range of bids have
resulted from input provided by
Dairy industry seeks
10-cent assessment
BY JAMES H. EVERHART
WASHINGTON In what may
have been an industry first,
dairymen nationwide are virtually
united behind a proposal that
would actually levy a 10-cent-per
hundredweight assessment on
milk production.
The proposal, however, is the
lesser of two evils, both wrought by
the Gramm-Rudman-Hollmgs
budget-cutting measure passed by
the Congress late last year.
Though the deficit-control
legislation will not affect the
controversial herd-buyout plan, it
has been applied to Commodity
Credit Corporation purchases of
surplus products.
In effect, the budget-cutting plan
to take effect today would slice
support-price payments by 4 3
percent, trimming the milk sup
port price by about 50 cents
In an effort to head off such a
drastic cut in support price
which would be followed April 1 by
another 40-cent cut required by the
1985 Farm Bill - a variety of dairy
Lancaster Farming, Saturday, March 1,1986
individual producers. From lows
under $lO to highs over $BO, dairy
fanners have been counseled to
weigh all the facts . . . and un
derbid at great risk to their
financial health.
One of the problems, explained
Lancaster County dairy extension
agent Glenn Shirk, is the amount of
debt looming over an individual
dairyman. Is the producer seeking
complete liquidation of his in
debtedness with his bid? Then, it
(Turn to Page A 43)
groups have proposed a 10-cent
per-cwt. assessment which would
save the CCC as much as the price
cut.
Bills to substitute the IQ-cent
assessment for the 50-cent
reduction in support price have
been introduced in both the House
and Senate, and had made little
headway at press time.
Presumably, any action as late as
next week could roll back the price
cuts already being put in place by
the CCC at week’s end.
USDA officials announced that
all CCC purchase prices for
cheese, butter and nonfat dry milk
would be discounted by 4 3 percent,
beginning at the close of business
Friday Any products offered for
sale after that point would be
subjci t to the lower, Gramm-
Rudmamzed prices.
To be eligible, products had to be
sampled or graded by close of
business (5 p.m local time)
Friday, and offers had to be
received by midnight at CCC
headquarters in Kansas Cih
BY JACK HUBLEY
HARRISBURG - Farmers
thinking about participating in the
Conservation Reserve Program
should think fast. The signup
period for the 1986 program begins
Monday and runs only two weeks
until Mar. 14.
At first glance the program
appears to be a return to the Soil
Bank years of the 1950’5. But,
whereas the primary goal of Soil
Bank was to reduce harvests by
taking acreage out of production,
the new CRP strives to improve
environmental quality by setting
aside only highly erodible land.
“It’s designed to take the worst
first,” is how Richard Pennay,
conservation program specialist
for the state Agricultural
Stabilization and Conservation
Service office, puts it
By taking at least 10 million
acres out of cultivation by 1990, the
government hopes ,-to reduce
erosion (by 764 million tons an
nually), improve water quality and
enhance wildlife habitat.
Hopefully, the program will result
in decreased crop production as
well, since USDA hopes to defray
at least part of its $5 billion cost
through reductions in Commodity
Credit Corporation payments.
The steep and shallow soils
Holstein Highlights
Always a traditional highlight, the annual sale held some
surprises and a lot of interest at this year's Holstein
Convention in Pittsburgh. For Lancaster Farming’s ex
tensive coverage of convention activities, turn to pages
A2O-26.
Perhaps a tribute to the changing face of the dairy in
dustry, promotional activities took on even greater
significance at this year’s Holstein Convention For
highlights oi the mall promotion, and a rundown on ac
tivities at ti'e junior Convention turn to pages 818 and
819
$7.50 per year
characteristic of land in Soil
Capability Classes VI, VII and VIII
will be eligible for entry, as will
ground in Classes II through V that
is eroding at three times the rate of
natural soil regeneration.
Although officials are hoping to
sign up some 82,000 acres in this
first round, Pennsylvania actually
has about 1.6 million acres that
qualify.
To enter the program, a farmer
submits a per-acre bid based on
average land rental rates.
Recognizing that rental rates vary
widely, USDA has developed
regional bidding pools. Penn
sylvania will be divided into two
pools. The southeastern and
southcentral counties, where
rental rates generally average
more than $3O an acre and can run
more than $lOO an acre, are in
cluded in Pool 1. The rest of the
state, where rates normally
average less than $3O an acre, will
be in Pool 2 “People bidding
within the pools will be bidding
against each other,” Pennay
pomtsout.
No less than 10 acres may be
entered, and the land must have
been used for crop production at
least two years out of the last five.
At least two-thirds of a field must
(Turn to Page A 46)