Pricing Co-op
(Continued from Page Al)
and hurricane Agnes had created
havoc in many areas of the
country. Dairy farmers’ costs
were skyrocketing while their
order prices were declining.”
“Cooperatives in the northeast
made repeated attempts to obtain
increases in the federal order
Class I prices with no success. It
became evident that if price im
provement was going to be a
reality, the cooperatives must do it
themselves.”
“Because of the great need for a
price increase to stem the flow of
dairy farmers out of business, and
the apparent inability to get price
relief through what we then con
sidered normal channels, the
cooperatives formed the Regional
Cooperative Marketing Agency,
Inc., which quickly became known
asRCMA.”
“RCMA was officially
established on June 22, 1973, as a
common marketing agency under
the Capper-Volstead Act with eight
cooperatives located in New
England and New York as charter
members.”
“The first RCMA over-order
price was established on Class I
milk in September 1973. Due to the
composition of the membership
and lack of producer represen
tation in the New York-New Jersey
market, an RCMA price was never
instituted in the Order §2 area.”
“RCMA prices did, however,
continue in effect during 18-months
YieldStandability
and
Disease Resistance
between September 1973 and
August 1975 in the New England
market and in the western New
York State orders. During that
period, |22 million was collected by
RCMA. Payments to producers
each month ranged from 10 cents
per cwt to 85 cents per cwt.”
“In December 1975, a court
action against Yankee Milk and
RCMA was started by Fairdale
Farms, Bennington, VT. In
layman’s language, the charges
were monopoly and price fixing.
Nine years later, in August 1984,
the case was fiiudly brought to a
conclusion when the U.S. Supreme
Court refused to hear the appeal,
and RCMA and Yankee were given
a favorable decision. This was a
landmark decision and firmly
established the legality of common
marketing agencies in general and
RCMA specifically. 'Die cost to
cooperative members was $1.4
million-but remember RCMA
collected $22 million in 1973-1975.”
“Now, once again, the need is
here. Dairy farmers in the nor
theast-as well as in other sections
of the country-are caught in a
cost-price squeeze. RCMA is an
available, legal entity to bring
relief.”
“To overcome some of the ob
stacles and problems that were
encountered in the 1970’5, RCMA
has been restructured to provide
direct membership for non
cooperative members as well as
cooperatives.”
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“The RCMA Board of Directors
has determined that any RCMA
over-order pricing program must
provide equity for handlers and
equity for producers. To do this, all
milk producers in the geographic
area from Maine to Virginia and
west to Ohio should be members of
RCMA. Thus, handlers can be
assured that all Class I milk will
carry the same price and all
producers will be paid the same
price. We could not give this
assurance in earlier days.”
“We are now in the process of
recruiting all cooperatives and
non-cooperative individual
producers in our area of operation
as members of RCMA. This means
that we must sign up an estimated
10,000 individual producers. The
RCMA Board has, by resolute
action, adopted a position that at
least 95% of all the producers must
be members of RCMA, either
through their cooperative or on an
individual basis, before any over
order pricing program will be put
into effect.”
“There will be two basic units in
the RCMA organizational struc
ture. Individual producers will be
assigned to geographic regions and
cooperative members will belong
to RCMA through their
cooperatives.”
“Each region and each
cooperative wiU elect one Delegate
for every 300 members, or fraction
thereof, and one Director from
each region and each cooperative.
Thus, cooperative members and
non-cooperative members will
have equitable representation in
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the operation of the organization.”
“Each individual non
cooperative member must sign a
Member’s Marketing Agreement
to become a member of RCMA.
Members of a cooperative become
members of RCMA when their
cooperative joins.”
“The Member’s Marketing
Agreement provides:
A. That members designate
RCMA as the marketing
agent for their milk.
1. The marketing function
is then
delegated back to the
member
by the RCMA Board of
Directors.
2. RCMA retains the
pricing
function.
B. That RCMA will use its
facilities and resources to
aid a member in marketing
when necessary to the best
advantage of all its mem
bers.
C. That a member can
cancel his Agreement with
RCMA with 90-days notice
prior to January Ist
following a full year of
membership, and after that
the Agreement can be
cancelled on January Ist
with 60-days prior notice.
D. That all members must
abide by the RCMA By-
Laws.
This Member’s Marketing
Agreement, however, does not
become effective until 95% of the
milk producers in the RCMA area
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have become members of RCMA
The RCMA pricing program will,
of course, be subject to the policy
decisions of the Delegates and the
Directors once the reorganization
has been completed. The pricing
program that we envision at the
present time would provide that:
1. RCMA- prices will not be in
stituted until the 95% sign-up has
been accomplished.
2. RCMA prices will be established
only on Class I milk.
3. RCMA prices will be established
only when conditions warrant.
4. Guidelines for determining
realistic price levels will be used.
In 1973-1975, an economic formula
was used as the basic guideline.
5. Costs of administration and
operation will be deducted from
over-order prices that are
established.
6. RCMA monies will be collected
on Class I milk from buying
handlers and RCMA will then
compute a pool price, or an
average price, to be paid to all
RCMA members.
7. Payment to producers will be
made by RCMA on RCMA checks.
All of this is dependent on one
thing—membership, both
cooperative and non-cooperative.
We are in the midst of this massive
membership drive at the moment.
We are attempting to contact each
of the estimated 10,000 non
cooperative producers and all of
the cooperatives in the northeast.
Being a realist, this looked like
an impossible task-and still looks
to be a very difficult task.
However, the attention and the
support given to the program is
very encouraging. Non
cooperative producers are giving
of their time and working long
hours. From Maine to Penn
sylvania, areas are organized for
the sign-up of the individual
producers. In New York and
Pennsylvania, where the majority
of the non-cooperative members
are located, many meetings have
been held and county organization
is well on its way.
Members of the Pennsylvania
Steering Committee are:
Carl Brown, Pine Grove; Edwin
Kremer, Milton; Karl Kroeck,
Knoxville; Robert Pardoe, Milton;
Arden Tewksbury, Meshoppen;
and Harold Wolfe, Centre Hall.
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