Milk Component Pricing
BY ROBERT E. LEIBY
AND DAVID L. DUNBAR ‘
Lehigh Co. Agents
Component pricing of milk is
not a new concept Dr. Robert
Yonkers, Penn State Ag. Econom
ist says it has been widely dis
cussed in the dairy industry for
much of the past 30 years. Today,
several factors have once again
focused attention on the subject
including the consumer shift away
from higher-fat dairy products,
successful implementation two
years ago of a milkfat-protein
pricing scheme in Federal Order
136 (The Great Basin Market in
Utah), and USDA’s ranking of
sires based on animal model eco
nomic indexes which include
protein.
Under the current butterfat
differential-volume milk pricing
system, the value of milkfat is
determined directly, while the
remainder, or residual value of
raw milk is allocated to the skim
portion. Some handlers and coops
in the Northeast and Middle
Adantic states do pay premiums to
producers based on protein per
cent according to Yonkers. How
ever, this is not a true multiple
component pricing scheme, since
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buyers of raw milk are not always
charged based on protein content
of the milk. Rather, this is a milk
procurement incentive used by
those handlers manufacturing
dairy products (primarily cheese)
whose yields are sensitive to the
protein content of raw milk.
Class I milk, which is used for
fluid dairy products, is usually
exempt from pricing based on pro
tein or solids-not-fat content. The
yield of fluid products is not sensi
tive to these components; 100
pounds of raw milk yields 11 5/8
gallons of fluid milk product
regardless of protein or solids-not
fat content Yonkers reminds us
that’s not true for other classes of
dairy products. For example, the
yield of non-fat dry milk is depen
dent entirely on the solids-not-fat
content of raw milk. Therefore,
only handlers manufacturing
Class II (and Class 111, where
applicable) dairy products are
charged for milk based on protein
or solids-not-fat under a multiple
component pricing scheme.
So, what does all this mean to
Pennsylvania Dairy producers? A
group of dairy cooperatives in the
Federal Order 4 marketing area
(which includes IS counties in
southeastern Pennsylvania) has
petitioned USDA requesting a
hearing on the issue of pricing
milk for both milkfat and solids
not-fat. In addition, it is expected
that within a year or two a similar
petition will be filed covering
Federal Order 36 (including 14
western Pennsylvania counties),
except protein may replace solids
not-fat as a priced component.
Regardless of the type of pricing
scheme, the average price per hun
dredweight paid to producers for
milk in any Federal Order is
expected to remain the same.
However, the milk check of any
individual producer may change
based on the value of milk
components.
Dairy producers should remain
informed about such pricing
schemes because, if USDA
recommends that a referendum be
held, all producers in a Federal
Order could vote on replacing but
terfat differential-volume milk
pricing with a multiple component
milk pricing system. In addition,
dairy producers may wish to eva
luate current nutrition and breed
ing programs in order to be pre
pared to make changes should a
new. multiple component milk
pricing scheme be introduced.
Lancaster Farming Saturday, January 13,1990-Di
Protect Drainage System
By Checking Outlet Flow
LEESPORT (Berks Co.) — A
subsurface (tile) drainage system
is only as good as its outlet. The
investment of a little time, paint,
and a steel post can help farmers
protect substantial investments in
subsurface drainage systems,
according to Duane Pysher, Dis
trict Conservationist, USDA Soil
Conservation Service.
“The key to a good subsurface
drainage system is a free-flowing
outlet,” said Pysher. “However,
with the passing years following
original installation, many outlets
become ‘lost’ or damaged.”
Heavy vegetative growth, siltation
from flooding, livestock tram
pling, and snow plow damage
combine to clog or obliviate the
outlet’s location. The result is a
drainage system that is less effi
cient or ceases to function
altogether.
Evidence of a malfunctioning
drainage system includes a stream
of water that pops up in the Held
where there was none before or an
area that remains wet long after
the test of the field has dried out
To correct or prevent this prob
lem, the outlet must be returned to
a free-flowing condition. But how
do you And a Tost’ outlet without
spending a lot of time and effort
digging in a hit-or-miss fashion?
“Simple,” said Pysher. “Just
paint fluorescent orange on a stan
dard 6-foot steel fence post and
place one post beside each drain
age outlet on the farm.”
Pysher indicated the posts are
readily available at reasonable
cost The posts serve as permanent
markers to quickly locate outlets
during semi-annual maintenance
checks, they alert equipment oper
ators to be more careful in the post
areas, and they are particularly
helpful in pointing out drainage
outlets to new landowners or ten
ants when farms change hands or
management
A small investment in time and
materials now can pay big
dividends in preventing future
drainage system damage and loca
tion problems.
“All subsurface drainage sys
tems should be checked after
every major storm for damage or
at least semi-annually in the
spring and fall,” said Pysher.
“Remember, your drainage sys
tems will only serve you as well as
you maintain their outlets.”
Land use planning assistance is
available from the U.S. Soil Con
servation Service located in the
Agricultural Center in Bern
Township.
Corn And Crops
Day Scheduled
NEW BLOOMFIELD (Perry
Co.) — Farmers are invited to
attend the Perry County Com Day
Program scheduled for Friday,
January 26, 1990, at Messiah
Lutheran Church in Elliotsburg.
The program will feature topics
cm new tillage equipment, com sil
age, grain storage safety and fumi
gation, and an update on Pennsyl
vania’s pesticide laws. The meet
ing, beginning at 9:30 a.m., has
been approved for four credits of
update training for restricted-use
pesticide license holders.
For more information or to
reserve lunch at $3.50 per person,
call the Perry County Extension
office at 582-2131 ext. 243.
‘Animal Rights’
Focus
Of Meeting
OCTORARA (Lancaster
Co.) — The Octorara Young Far
mers Association will hold a
meeting to discuss the controversy
surrounding animal rights on
January 15, 1990, at 7:30 p.m. in
the Ag Ed Room of Octorara High
School.
The speaker will be Carl Brown
of the Pennsylvania Farmers
Association.