A34-Lancaster Farming, Saturday, October 31, 1987
Dairymen Facing Fede
BY JOYCE BUPP
York Co. Correspondent
GETTYSBURG Milk pro
duction nationwide has dropped
nearly 12 billion pounds and gov
ernment purchases are close to 5
billion pounds, the trigger level on
which a legislated price support
cut on January 1, 1988 will hinge.
But, says Fred Butler, president
of the Middle Atlantic Division of
Dairymen, Inc., production is
already climbing in some dairy
intensive states, with October pro
duction in California up an esti
mated 12 percent.
Butler reviewed the rapidly
changing dairy production picture
during his president’s report to
nearly 300 members and guests
attending the division’s annual
meeting, held Oclqber 23 at the
Gettysburg Sheraton Inn.
“Projections are, today, that we
will most likely get a cut on Jan
uary 1, which is supposed to be 50
cents,” Butler noted. “In my opin
ion, the 5 billion pound figure is so
close that we could get a 25-cent
cut in the support price on January
1 and again on July 1, if overall
production starts to climb.”
In addition, agriculture is facing
$1.3 billion in proposed budget
cuts under the mandated federal
deficit reduction of the Gramm-
Rudman-Hollings legislation.
Dairy producers could face a 4 to
6-cent per hundredweight assess
ment to fund their share of that
mandated budget cut.
Still, producers have recently
seen more positive prices, with
Dairymen’s Middle Atlantic mem
bers receiving as much as ten cents
per hundredweight over the Feder
al Order 4 announced price during
the past five months.
Some $7 million of equity will
be revolved to the 6400 members
of Dairymen on December 1, But
ler added, even while the
Louisville-based cooperative’s
five-year equity revolving pro
gram has been extended by board
action to a six-year plan, to main
tain desired equity levels.
Some Middle Atlantic division
members have added as much as
an additional 60 cents per hundred
to their price, through Dairymen’s
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Fall Incentive Plan, according to
division manager John Collins. An
average per hundredweight
increase, through the incentive to
produce milk when it is most
needed, has been 7 cents. Dairy
men’s board has voted to extend
the Fall Incentive program through
at least 1988.
Collins lauded dairy producers
in the Federal Order 4 area for
efforts which earned members of
the Middle Atlantic Cooperative
Milk Market Association
(MACMMA) an over-order pre
mium of 21 cents per hundred
weight for September production.
Appreciation was extended to
members for high quality milk
supplies being produced in the
ml Budget
Middle Atlantic division, and to
employees whose efforts have
resulted in profitable supply and
equipment operations.
Addressing Dairymen’s region
al and corporate picture were re
gional manager John Reynolds and
chief operating officer Jim
McDowell.
Reynolds also cited changing
market conditions in the industry
as being, “as out of control as the
weather is.” Assessments, diver
sions, falling support prices, and
the Federal Land Bank’s financial
problems are all changes which
have played havoc with milk price
stability, dairy producer income,
and dropping production volumes.
McDowell reviewed dairy-
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related legislative proposals under
consideration by Congress and the
trade and budget deficiencies bur
dening the nation’s economy.
While milk production shows
some indications of an upward
trend, the Dairymen operation’s
officer isn’t predicting a product
ion explosion. Present favorable
feed costs may only be short term,
and producers are using improved
income levels to pay down debt,
rather than invest in new equip
ment, cattle and facilities.
McDowell also briefed mem
bers on Dairymen’s signing of a
letter of intent to joint venture the
Flav-O-Rich subsidiary’s fluid
processing facilities with those of
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“We must meet the economic
needs of the members if a coopera
tive is to stay in business,” said
McDowell. “The alignments with
other companies, the diversifica
tion with other businesses, must
happen for long-term returns,
while still maintaining farmer
control.”
During the business session,
members ratified the election of
six directors to the division board.
Renominated and ratified for
three-year terms were, Marlin E.
Martin, District 12; Jesse I. Burall,
District 4; Paul R. Waybright, Dis
trict 13; Joyce A. Bupp, District 7;
Harry W. Hummel, District 11;
and Albert H. Mcllingcr, District
14,