N.E. Dairy Compact Commission
(Continued from Pago A2l)
growth in dairy farm establishment
in the past decade, and most of
those operations involve large
operations.
Furthermore, during the late
1980 s and early 19905, university
dairy and agricultural economic
research recommended production
of a minimum 1 million pounds per
employee in order to be profitable,
as well M milking a minimum herd
of 500 animals in order to attain a
middle income standard of living
for a single family.
While demand for milk has been
growing slightly, annual national
production increases have
exceeded the consumer demand.
Exports have been boosted and
maintained somewhat through the
USDA Dairy Export Incentive
Program, but world prices kept
low through aritificial means and
dumping, and higher non
agricultural overhead demands on
United States dairy farmers pre
vent non-domestic markets from
serving to assimilate annual dairy
production increases.
All that aside, die Northeast
Dairy Compact is being held up by
its promoters as a successful model
for stabilizing dairy farmer
income.
This is being asserted by certain
milk marketing interests and farm
policy groups.
The expressed goal of these
groups is to see the Northeast
Dairy Compact extended indefi
nitely, and opened up to include
the Middle Atlantic states.
Another goal is to create a South
ern Daily Compact, and others in
the nation, if possible.
Oil the other hand, representa
tives of independent producers and
processors and some smaller dairy
cooperatives with local markets
have spoke out against die Com
pact, because it removes some of
die potential reward for actually
FRANK HIGDON
Dairy Agent
Blair Co. Extension
HOLIDAYSBURG (Blair Co.)
Dairy farmers and dairy
industry partners are working
together more closely than ever
to sell milk - and it has helped
increase demand for dairy prod
ucts.
Throughout the 19905, total
milk sales have shown an annu
al average increase of 1 percent
to 2 percent.
While butter and cheese mar
kets continue to show some
weakness, fluid milk production
remains strong and well above
year ago levels in many major
being competitive and more
efficient
Instead, it is the opinion of the
opposing side that the guarantees
offered would seem to pave the
way for less diversity in the dairy
industry, as well as fewer players.
For those unfamiliar with how
milk is priced under the Compact,
die minimum beverage milk price
(Class I) for farmers is set to reflect
a reasonable cost of production.
(The level of actual margin
depends on the individual
operation).
Dairy Market Snapshot
milk producing areas.
At the national level, milk
prices are sinking. They will slip
to $12.80 - $13.50/cwt. by next
year. That’s down 50 cents per
cwt. from the likely ’99 average,
close to farm price of’9B.
Low feed costs and strong
current prices will stimulate
production and depress prices
for the rest of this year.
Since 1984, dairy promotion
organizations have helped sell
more than 200 billion additional
pounds of total milk over the
amount projected by the US.
Department of Agriculture. For
the first time, dairy farmer pro
motion groups, processors and
Lancaster Farming, Saturday, June 26, 1999-A29
However, tarmets get paid on
the basis of all the uses of their
milk, a “blend price,” which is a
direct result of how it is marketed.
The more of the milk supply that
gets directed to uses other than
beverage, the lower the overall far
mer price.
Since the Compact has been in
existence, the percentage of milk
in the region being used for Class I
has dropped.
However, since the Commis
sion doesn’t set minimum farmer
prices on milk used for other pur-
grocery stores are working
together to sell more milk.
The American Dairy
Association & Dairy Council
Mid East has been working with
grocery stores using “Got Milk,”
and the “milk mustache” adver
tising in school food service,
nutrition marketing, public rela
tions, consumer promotions, and
research and technology efforts.
The Agriculture Department
will provide more daily export
ffflL/s M* o " ” a
poses, it is considering a supply
management system to prevent
continued percentage decreases in
Class I uses.
The bottom line is this: the far
mer’s price is more a reflection of
the percentage of his milk that gets
used for Class I, than a reflection of
how high the price set for Class I
milk.
To testify, or for more informa
tion, call the Compact at (802)
229-1941, or visit the web site at
www.dairycompact.org.
subsidies under the Dairy
Export Incentive Program for
farmers hurt by low prices. It
will allow exports of 50,000 tons
of products until June 30.
Exporters can bid for nonfat
dry milk, whole milk powder
and cheese. Although subsidized
products cannot be exported to
Asia, they can be sold to the
Caribbean, Central and South
America, Africa and the Middle
East.