Penn State Economists
(continued from Page A 1)
tection to small and medium
sized dairy producers when milk
prices are low.”
‘The bill has two unique fea
tures,” Bailey said. “First, the
size of the supplemental pay
ment is tied to general market
conditions. That means produc
ers in the Northeast and South
east, where most milk is used for
bottling purposes, can benefit as
well as producers in the Midwest
and West, where more milk is
used to make cheese.
“Second, the bulk of the pay
ments are targeted to small and
medium-sized dairy operations
that have fewer than 150 cows.
That’s beneficial to many states
that have large numbers of small
family farms, like Pennsylva
nia,” Bailey explained. “For ex
ample, a ‘general’ payment rate
of 50 cents per hundred pounds
(CWT) of milk is made when the
annual average Class 111 price of
milk is below $10.50 per hun
dredweight. The Class 111 price
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Peterbilt 379 tractor, Cat 3406 @ 435 HP, 10 speed w/jake, 63 in. double sleeper (2) 1995 international Mod 8200, tractors,
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lbs, excellent condition
More Equipment Arriving: Plus assorted small tools, equipment, and parts Some new tools also Check out our web site for up
dates'
Beaver Road then left on Monroe
From Pennsylvania: Turnpike exit 16, Rte 34 south turns into Rte 94 Follow to Md line then it becomes Rte 30 Follow to
Manchester, left on Beaver than left on Monroe
“Watch for the Sale Signs
Auction Marketing Specialists
www.exi
of milk averaged about $9.74 in
2000.
“An additional payment of 30
cents per hundred pounds of
milk is made if a producer did
not expand milk production
from the previous year. That
makes the maximum payment
under the dairy fairness bill
equal to 80 cents per hun
dredweight a significant price
increase. For a farm with 75
cows shipping 1.26 million
pounds a year, they could
receive $6,290 if they expanded
and $10,065 if they did not.”
The study shows the bill
would provide a lower level of
price protection when market
prices are stronger, Bailey said.
If the annual average Class 111
price of milk rises to between
$12.01 and $12.50 per hun
dredweight, the general pay
ment rate is 18 cents per
hundredweight and the addi
tional payment rate for not ex
panding is 14 cents per
hundredweight.
3051 Monroe Street, Manchester, Maryland
(Just ofT Md. Route 30)
From 1-695 go North on 795/al dead end turn left on Md Route 30, go 10 miles then make right on
irtion.cni
“Our farm with 75 cows
would then receive $2,265 if they
expanded and $4,026 if they
didn’t,” he explained.
Farmers receive the payments
on the first 2.6 million pounds of
milk produced, matching the
criteria of the federal Dairy
Market Loss Assistance pro
gram. While all dairy farmers
are eligible to receive the pay
ment, the bulk of the dollars
spent under the bill would go to
small and medium-sized dairy
farms, typically under 150 cows.
Congress will consider the
cost of the program as it decides
whether to pass the legislation.
The study estimates the cost will
vary from $570 million in a low
price year to $206 million in a
high-price year. Most of the pay
ments will go to regions of the
U.S. with a heavy concentration
Terms and Conditions
Listing is subject to change by auction dale All announce
ments made day of auction supersede all printed material
Cash in full at time of auction, major credit cards. Bank
Guaranteed Checks, No Checks accepted unless accompa
nied by a guarantee 10% buyers premium
of small and medium-sized
family farms and a lot of milk.
Bailey and Dunn observe that
the bill would not completely
solve the problem of “too much
milk” in low price years. “On
the one hand, there is an addi
tional incentive payment for
producers to not expand their
milk production,” Bailey said.
“On the other hand, producers
have the option of taking the
i^aisHcAmiax
See pages 827-832
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891257
minimum ’general’ payment
and expanding milk production.
However, these payments are
only made on the first 2.6 mil
lion pounds of milk produced.
Thus, the bill tries to limit the
potential for expansion of milk
production.”
The complete study is avail
able on the World Wide Web at
http://www.aers.psu.edu/
dairyoutlook/.
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