Budget Agreement Falls Short
that result in greater program
equity for producers and more
effective distribution of this as
sistance than has occurred
under the Freedom to Farm Act
and as a result of two prior
emergency packages. As
surances need to be made that
WASHINGTON, D.C. The
National Farmers Union (NFU)
recently acknowledged House
and Senate action to set aside
$7.1 billion for income assist
ance initiatives for fanners and
ranchers.
However, the organization
cautioned that this level of as
sistance and details of its alloca
tion and distribution are
inadequate to meet the ongoing
economic crisis in agriculture.
“In this atmosphere of record
low farm prices, another assist
ance package for agriculture is
crucial,’’ said NFU President
Leland Swenson. “Still, we are
concerned that this agreement
provides assistance at a level
lower than that of last year’s
package. It fails to identify
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funds for weather-related crop
failures that we know will come
to several regions of the coun
try.”
The agreement, which is the
result of a compromise between
the Republican House and
Senate budget proposals, sets
aside SS.S billion for direct pay
ments to be paid this year. NFU
believes that this assistance is in
sufficient given the prospects for
continued pressure on commod
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where.
Additionally, NFU challenges
the authorizing committees in
Congress to implement policies
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dated from 31 to 11. “That gave
us six weeks to put together an
operating system for this new
order,” said Walker.
With the merger, the newly
formed Northeast order or Fed
eral Order No. 1, which includes
the old Federal Orders 1,2, and
4, is the second largest order,
producing 2.1 billion pounds of
milk monthly. It is also the larg
est order for Class I volume at
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aid will be provided in a timely
fashion to farmers and ranchers
according to need.
“The cumulative impact of
extremely low commodity prices
for the last three years is taking
a heavy toll on rural America,”
joint Annual Convention
(Continued from Page A 26)
900 million pounds monthly.
The Mid East Federal Order
is the third largest and resulted
from the merger of Federal
Orders 33,36,40, and 49.
Walker evaluated the prog
ress of four major issues in fed
eral order reform. Those issues
included order consolidation,
Class I milk pricing, formula
price replacement, and multiple
component pricing.
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Lancaster Farming, Saturday, May 27, 2000-A35
said Swenson. “We are pleased
Congress provided additional
assistance in the budget, but I
don’t think it is enough to ad
dress the problems. I had hoped
they would do better.”
“For the most part, everyone
is satisfied with the new federal
orders,” said Walker. “However
there is still some unrest about
unregulated areas in the North
east and about California re
maining unregulated.”
According to Walker, the con
solidation eliminated duplicate
reporting and grouped compet)
live handlers into the same mar
kets.
Positives that Walker cited for the Class I dif
ferentials were that producer revenue was eitl r
enhanced or unchanged, price alignment v s
improved across orders, and price align im it
was improved with unregulated areas.
“There is still intense regionalism between the
markets,” said Walker. “This comes back to the
producer price differential.”
Reasons that Walker cited for the regional
differences were that the Class I milk price was
higher in some areas, the Class I percentage of
total volume differed between regions, and (’ e
PPD was added to the higher of either Class i 1
or IV milk price.
“The Basic Formula Price is still a problem,”
said Walker.
The positive aspects that came from reform
ing the BFP were that grade B milk no longer
dictates grade A milk price and that prices are
more transparent.
“Many people question the NASS survey reli
ability,” said Walker. “They also question the
make allowances and yields. How do we know
that a volunteer survey is accurate?”
Walker indicated that more than 100 people
participated in a recent hearing to address the
BFP pricing system. 32 proposals were heard
during five days of testimony.
For the Northeast region, Walker said that
hauling rates in New York are still a producer
concern. “It’s difficult to understand what
caused the increases.”
He also claimed that reporting and payment
dates are too narrow. Coordinating the informa
tion flow is also challenging.
“Long term, we are going to have to look at
this,” said Walker. “It’s creating a lot of prob
lems for cooperatives, processors, and the fed
eral order staff.”
Ken Bailey reviewed the latest trends in the
dairy industry and showed how increased pro
duction drove up cheese supplies.
“Cheese stocks are six percent ahead of what
they were a year ago,” said Bailey. “That’s
what’s keeping prices down.”
When he outlined butter prices, he showed
that decreased stocks were strengthening the
butter or Class IV price.
“We are also importing more dairy products
than we have been,” said Bailey. “But could it be
because our cheese and butter prices are higher
than other countries?”
Bailey said that forecasted prices depend on a
lot of things. “Futures are showing that the price
won’t get above $12.50,” said Bailey. “But that
depends on cow numbers, expansion, and the
weather. We don’t really know what will happen
in the second half of the year.”
Bailey concluded his presentation with these
points. Milk supply will continue to expand, the
big will continue to get bigger, and some farmers
will be pushed out.
He questioned whether the existing policies
will be tweaked and if we are positioning our
farms for the future.
“Regardless of what happens, there are tre
mendous opportunities for the dairy industry in
the Northeast,” said Bailey.
Bailey moderated a panel discussion that in
cluded John Vetne, Esq.; Robert Wellington,
Agri-Mark; Sharad Mathur, Parmalat USA; and
Pete Hardin, The Milk Weed. The panel ad
dressed issues such as a free market, the dairy
compact, the federal order system, and govern
ment involvement.
Other events during the two-day convention
included a breakfast buffet, Gettysburg Military
Park tour, Shotgun Golf Tournament, guided
bus tour of Hershey, and a cocktail party.
The convention culminated with the Annual
Banquet on Tuesday evening, where awards and
presentations were made.