A24-Lancaster Farming, Saturday, March 18. 2000
Temporary Increase Added
(Continued from Page A 1)
that is sold as Class I milk in
Pennsylvania, PMMB expects
the added premium will influ
ence other premiums.
“Since we passed on the
premium to a good portion of
dairy producers, it will encour
age other markets to pay more
premiums for milk,” said Luke
Brubaker, a member of the
Pennsylvania Milk Marketing
Board and a dairy farmer in Mt.
Joy. “It isn’t going to be a total
help for everyone, but it is signif
icant assistance in a time with
profits are low to nothing or
even less.”
According to Brubaker,
PMMB wanted the increase to
be enough to help farmers but
not too much that it would flood
Pennsylvania’s market with out
side milk.
“If we increased the premium
too much, then processors could
purchase milk from outside the
state and transport it into Penn
sylvania for a cheaper price than
they could buy it from Pennsyl
vania dairy farmers,” said Bru
baker. “In general, though,
processors like to patronize
Pennsylvania dairy farmers be-
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dustry.”
PMMB has established an
order that calls for the tempo
rary increase. The increase is de
signed to alleviate from the
farmer some of the burden of
rising diesel fuel prices and low
milk prices.
The order calls for the tempo
rary increase to be extended for
two months past the point when
diesel fuel prices fall back down
to the November 1999 average,
which was $1.37 a gallon. The
two-month extension was estab
lished to help cover some of the
farmer’s costs incurred during
the months of February and
March, when fuel prices began
to rise.
The temporary increase in the
over-order premium resulted
from a March 2 emergency hear
ing held by PMMB. Several
farmer, processor, and con
sumer representatives testified
during the hearing.
According to Brubaker, even
though the temporary increase
will cause about a four-cent in
crease in the price per gallon at
the store, consumers at the hear
ing were in favor of the increase
as long as they knew it would
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help Pennsylvania’s dairy farm
ers. PMMB has even received
several letters from consumers
asking for the temporary in
crease to support the dairy
farmers.
Dairy farmers in Pennsylva
nia are fortunate to have the
Pennsylvania Milk Marketing
Board regulating the milk price
in stores. Since December 1999,
over-order premiums mandated
by PMMB have generated an
additional $194,752,000 to
Pennsylvania dairy farmers.
The Pennsylvania Milk Mar
keting Board is an independent
agency that has three represent
atives on the Board and a small
staff. The representatives on the
board include one farmer, one
farmer/processor, and one con
sumer.
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the farmer decreases, the price
in the store goes down almost si
multaneously, thanks to
PMMB,” said Brubaker. “It is
our job to see that the farmer re
ceives his fair share of his
labors.”
According to Brubaker, the
dairy industry is the biggest ag
riculture industry in Pennsylva
nia. It is very viable to the
infrastructure of Pennsylvania’s
economy. PMMB helps sustain
the dairy industry.
“99 percent of stores in Penn
sylvania sell their milk at the
minimum state price mandated
by PMMB,” said Brubaker.
“The farm price is the trigger
price that affects all milk prices.
When the producers lose money
on the milk price, the processor
and store retailer also lose prof
its.”
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“It is to the farmers’ advan
tage because of how quickly
store and processor prices re
spond to low milk prices,” said
Brubaker.
Although PMMB does not
expect it to save every dairy
farmer from lost profits, the
board does hope the temporary
increase will help sustain the
dairy industry in Pennsylvania.
“Not every farmer is going to
received same mailbox because
of administration costs and
premiums,” said Brubaker.
“And not everyone is going to
have the same economics as his
neighbor because of input costs
and debt load. Overall, the in
dustry has been very receptive to
what we’re doing because it help
keeps the dairy industry alive in
Pennsylvania.”
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