New Prices For
New York
On May 2 the New York legisa
ture passed, and Governor Cuomo
signed, a bill amending the Agri
culture and Markets Law (the
Rogers-Alien Act) allowing the
New York commissioner of agri
culture to set an interim price that
licensed handlers pay for milk pro
duced in New York.
Five days later the commission
er announced the minimum prices
of $13.85 for Class I milk and
$10.30 for Classes II and 111, start
ing June 1 in New York state.
These are interim prices good
for up to 180 days. Beyond that.
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MILK
CHECK
THOMAS JURCHAK
Dairy Specialist
Lackawanna County
the commissioner is expected to
set prices for one year, from testi
mony presented at 12 days of hear
ings held in April.
These would have to be
approved in a referendum by two
thirds of the producers. Announce
ment of these prices is expected in
June.
The legislation also provides for
a fast track schedule of no more
than 100 days to change the prices
when petitioned by an organiza
tion representing 35 percent of the
producers in the market to be cov
ered by the order.
Handlers buying milk in New
York and mattering it in other
states, as well as New York hand
lers buying milk out of state and
selling it in New York, are
expected to pay compensatory
payments to the New York “pool”
which will distribute the money to
the New York producers. There
may be competitive credits for
handlers of Class II and 111 milk
selling products in out-of-state
markets.
Finally there will be a maximum
margin of 200 percent of the fluid
milk price from the farm to the
retail sale.
Bottom Line
If all goes well, the New York
commissioner said he expects the
price to New York producers to be
increased by 80 cents.
The June Class I price for Order
2 at the 201- to 210-mile zone will
be $12.46, but in New York state it
will be $13.85 or $1.39 higher.
Considering a 40 percent Class I
utilization and Class II and in
prices about 16 cents over the
Order 2 minimum, the blend price
to farmers should come close to
that The bigger question is, how
much of this 75- or 80-cent
increase will be “new” money
from handlers, added to present
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over order premiums, and how
much will come from handler pre
miums already being paid to
producers?
The spread between the Federal
Order minimums and the emergen
cy interim prices will narrow, if the
market prices increase as expected
through the summer and fall
months.
The average over-order differ
ence would be lower as market
prices increase. However, as men
tioned earlier, hearings have
already been held for additional
changes in the interim price that
may be announced in June that can
extend for one year.
The effect on Pennsylvania pro
ducers shipping milk into New
York markets will depend on pre
miums paid by handlers and the
success of RCMA in collecting the
difference for its out of state
members.
The ripple effect on action in
states bordering New York
such as Vermont, Massachusetts
and New Jersey will also a
make difference.
The Pennsylvania Milk Market-
Lancaster Farming, Saturday, June 1,1991-E5
ing Board held a hearing May 9 on
the present $ 1.35 over order price
on Class I milk and a decision is
expected soon.
It took a lot of effort from many
cooperatives, organizations and
individuals to get the changes in
the law that allowed the action of
the New York commissioner to
change producer prices, but the
process was helped considerably
by the existence of RCMA.
It not only provided much of the
leadership but, by forming RCBA,
also provided the necessary 35 per
cent of the producers in the market
to make an application and have a
hearing as required by the law.
The original purpose of RCMA
was to get over order premiums for
producers without die need for
new legislation. That failed
because of a reluctant minority but
it still provides an important role in
representing its members, both
cooperative and independent, as
the legislative road to price
improvement is travelled more
often and seems to be the way of
the future.
Last month I said it appeared
that milk prices had bottomed out
and would start their seasonal rise
earlier than usual this year. The
key was milk production and
cheese prices and this month we
have good signs from both.
Nothing spectacular and maybe
not a trend, but they’re looking
better.
The Minnesota Wisconsin Price
Series made its first monthly
increase in April, since July 1990.
It went up only 2 cents to $10.04,
but for April that’s a good sign.
Even better was an increase in
both barrel and block cheese prices
at the National Cheese Exchange
on May 10. Again, it was only 1
cent, but the week before, barrels
increased 1.5 cents a pound and
that was the first improvement
since prices fell to support levels
sue months ago. Besides, 1 cent on
cheese is worth 10 cents on milk
and this year we’re counting
pennies.
In any case, it looks good, com
ing now in the spring. And with
lower cow numbers this year, even
the grass may not bring on a flush.
Federal Order Changes
All the amendments to Federal
Orders 1, 2 and 4 that became
effective in April, will show up in
your milk check this month.
These include three classes of
milk with three different prices in
all three Orders, and for Order 2,
additional changes in transporta
tion differentials and a lower Class
I differential.
There will also be a suspension
of the Louisville Plan payment that
will be worth 30 cents to Order 2
shippers. This will make the most
significant difference in the blend
price for most producers.
The Class I price in Order 2 will
be $12.46 for April or 25 cents
lower than March. Half of that
came from the lower Class I diffe
rential and half from a drop in the
Minnesota-Wisconsin Price from
January to February.
The “new” Class II price for
“soft” dairy products will be $ 10 or
5 cents more than the “old” Class II
price that included butter, powder
and hard cheese.
The new Class 111 price will be
$9.95 or what the former Class II
price would have been. Transpor
tation differentials will be higher
for farms within the 201- to
210-mile zone and lower for those
beyond.
Changes in product identifica
tion and classification will also
make a difference. Also, April is
(Turn to Pago E 6)
Credit Due
Good News