A22-Lancaster Farming, Saturday, May 28, 1988 Dairy Industry Versus Dairy Farmers (Continued from Page A 1) category which includes fluid whole milk and generally includes related fluid products. Class II is a lower priced category which includes all milk used for manu facturing purposes. In' those other Federal Order areas with a Class 111, the third class is used for all the “hard” man ufactured products and usually receives the lowest price which includes all cheeses (other than cottage), butter, nonfat dry milk powder, and the other products not included in Classes I and 11. Under the Federation’s propos al, they are requesting that most cheeses such as the Swiss and Ita lian cheeses would be included in the Class II which would net a higher price for producers. Class 111 would include just those residu al products which are eligible for purchase by the Credit Commodity Corporation. “The major thrust of our propos al is that the hard storable products which are used to balance the rest of the market are of the lower val ue. And those products in between those are companion products to Class I and are of greater value and our producers should get a belter price for milk used for those pro ducts,” explained Fraher. Apparently, getting more money for the dairy farmer may not always be in the dairy farmer’s best interest. Sounds confusing and complicated and it is. The bus iness of dairying extends far bey ond the gate at the end of the farm lane. Getting the milk to market is just the beginning of marketing milk, a complex issue affecting the entire dairy industry. According to Jack Kirkland nivir nunnnrn USAS Mm C/ffUf f The World’s Fastest Lawn Mowers from the Penn State University Department of Agricultural Eco nomics, cheeses are the hottest selling item on the market now and farmers should get a premium for the milk being manufactured into cheese. However, Kirkland emphasized a price increase for cheese manufacturers in the north east area may have a negative effect. The bottom line here is what is best for the industry as a whole. “We get so concerned about helping the farmer we forget the manufacturing side of the dairy industry is very delicately balanced,” explained Kirkland. “The cheese market is a nationally competitive market and we have to be really careful. One change may benefit one segment of the indus try, but it’s like throwing a rock into a pond. There’s a ripple effect.” WET CAST CONCRETE SLATS Kirkland added that a price increase to the Northeast cheese manufacturers, of which many arc already paying a premium to milk producers on percent milk solids, may force some of them out of bus iness. Also, the higher processing costs could allow cheese manufac turers from the Midwest to suc cessfully compete in the Northeast market, according to Kirkland. “This is not a black and white issue. There are a lot of grays here,” he added. Eastern Milk Producers Cooperative will urge the USDA to create Class 111 under the same guidelines which arc used for other federal orders for Class 111 throughout the country. Under their proposal milk used to pro duce cheeses would fall into the lower pricing category of Class 111. “Their (Penn Marva) proposal SETTING THE TREND » - -acaß:- Penning 100% SOLID STEEL ROD CONSTRUCTION (QUALITY for life Avii-f«vwt CONFINEMENT SYSTEMS, INC. Ph - 717*274-3498 installation CONFINEMENT SYSTEMS INC. Si»nd» rt 4»s. 4x6, LARGE SELECTION IN STOCK For Your Convenience would place (Northeast) cheese manufacturers at a disadvantage. By including those cheeses in Class 11, cheese manufacturers would have to pay more for the milk in those areas than other cheese manufacturers would have to pay in other areas of the coun try,” explained Joe Mathis, Eco nomist for EMPC. “This is like shooting yourself in the foot as far as I’m concerned. It is particularly important for the manufacturing side of the business to remain competitive in the national market. The cheese mark et is not a regional market the way the fluid milk market is. It is a national marketplace and the cheese manufacturers need to stay competitive,” said Mathis. Midwest cheese manufacturers already enjoy the advantage of , fi/ssssadessssssss *sssr Farrowing Crate ,a;;i INCORPORATED lower production costs compared to that of their Northeastern coun terparts. A 10-cent per hundred weight increase would eat away at theNortheastemers’ profit margin. However, Kirkland pointed out that perhaps transportation costs to ship product to the Northeast may discourage Midwest manufactur ers from cashing in on their advantage. “I’d have to see the numbers and so will the USDA before they make any decisions,” said Kirkland. Although the hearings arc sche duled to begin in June, there will be 67 proposed amendments to the Federal Orders before the USDA. Fraher predicted it may be another year before dairymen see the effects in their milk checks. LANCASTER FARMING FOR COMPLETE AND UP-TO-DATE MARKET REPORTS '•AH READ Gestation Stalls STAINLESI :ei r; (JS * ‘* 3o 6s% e '»
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