Weekly Dairy Market Outlook
(Continued from Page Al 6)
You will recall that USDA just
announced changes in the formu
las used to compute milk prices.
These formulas determine com
ponent prices based on wholesale
commodity prices. For June, the
prices for commodities were: but
ter $1.0797 per pound; nonfat dry
milk $0.8040 per pound; cheese
$1.1464 per pound, and dry whey
$0.1396 per pound. These com
modity prices are then used with
the formulas to determine com
ponent values for butterfat, pro
tein, and other solids. The June
component values showed up on
producer milk checks in July. We
all know what butterfat and pro
tein are. Other dairy solids con
sist mainly of lactose and some
minerals.
The new formula for “other so
lids” is pretty simple. Take the
price of dry whey and subtract
$0,159 per pound. This is the
“make allowance.” It covers the
cost of processing dry whey.
Then multiply the resulting fig
ure by 1.03, or the yield factor.
You should cpme up with a fig
ure of -$0.02 per pound, exactly
what is on your milk check.
There are two reasons why this
figure is negative. First, the make
allowance and yield factor were
slightly lowered in the new for
NFU Airs Frustration
On COOL Ruling
WASHINGTON, D.C. Na
tional Farmers Union expressed
its dismay at the U.S. House of
Representatives’ recent narrow
defeat of legislation to uphold
mandatory country-pf-oriein
meat labeling.
The House rejected by a
15-vote margin an amendment to
the fiscal year 2004 agriculture
appropriations bill that Reps.
Dennis Rehberg, R-Mont., and
Darlene Hooley, D-Ore., intro
duced to protect implementation
funding for mandatory country
of-origin labeling for beef, pork,
lamb and fish. Without the
amendment, the House bill essen
tially prevents the U.S. Depart
ment of Agriculture from imple
menting meat labeling by the
September 2004 deadline.
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mulas. Second, the price of dry
whey plummeted from $0,268 per
pound at the latter half of 2001 to
a low of $0.14 per pound in re
cent weeks. So the market value
of dry whey exceeds the cost of
processing it. If we did not
change the other solids formula,
the price of this component
would have been -$0.0004 per
pound, still negative.
The more important dollar fig
ures on the milk check are what
producers get for butterfat and
protein. The price of butterfat for
June was $1.1576 per pound. By
my calculations, had we kept the
old formulas, producers would
have received two cents more per
pound for butterfat. The protein
price for June was $1.9434 per
pound. I computed that this price
was over eight cents per pound
higher due to the new formulas.
My conclusion is that produc
ers are receiving more for protein
and slightly less for butterfat and
other solids. As long as dry whey
prices remain low, the price for
the other solids component on
the milk check will be negative.
Producers can offset this slight
deduction by producing more
protein or butterfat. As far as the
formula change is concerned,
most dairy producers are proba
bly better off with the change.
“National Farmers Union, and
the farmers and ranchers we rep
resent, are disappointed by the
House decision; however, this
vote could have easily gone the
ptlfer way,” said NFU President
Dave Frederickson. “Less than a
majority of House members
voted to block the funding for
country-of-origin labeling, and 33
members had not made it back
from their districts to vote.
“The Rehberg-Hooley amend
ment came dose to winning de
spite the active opposition of the
House majority leadership, Presi
dent Bush, Agriculture Secretary
Veneman and the giant meat
packers,” said Frederickson.
“They may have won this round,
but our fight to protect this bene
ficial law is far from over.
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Sign-Up For New Crop
Disaster Program 2003
LANCASTER (Lancaster Co.)
Sign-up for the Crop Disaster
Program (CDP) for the 2001 or
2002 crop is now underway. The
closing date for sign-up will be
announced at a later date, but
producers will be given ample op
portunity to complete the pro
cess.
Payments for CDP are author
ized by the Agricultural Assist
ance Act of 2003, signed into law
on Feb. 20, to provide some $2
billion in aid for producers suffer
ing from natural disasters. The
CDP has no funding limitation,
but each producer is limited to
$BO,OOO.
Under CDP, producers will be
reimbursed for qualifying crop
production and quality losses to
State Farm Bureau Urges More Affordable
Telecommunications For Agriculture
STATE COLLEGE (Centre
Co.) Citing growing technolo
gy needs on farms ranging from
satellite communications to glob
al positions systems (GPS) that
monitor field crop production,
the Pennsylvania Farm Bureau
has called for passage of legisla
tion to make telecommunications
systems more available and af
fordable in rural areas.
The need was described by Ca
ressa Crone, a Farm Bureau
leader and Northumberland
County pork producer, during a
public forum convened in State
College, Monday, by Pennsylva
nia House Consumer Affairs
Chairman Raymond Bunt, (R
147th Dist.).
“Unfortunately, many of rural
Pennsylvania’s communities are
not provided affordable access to
today’s telecommunications in
frastructure,” Crone said. “Al
though the use of satellite serv
ices on our farm has been helpful,
it continues to be very expensive.
Other services would provide us
even greater efficiency in our
production practices, but the cost
Lancaster
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crops for either the 2001 or 2002
crops. Payments will be issued for
losses exceeding 35% of expected
production at:
• 50 percent of the established
price for crops that were covered
by crop insurance;
• 50 percent of the established
price for crops for which crop in
surance was not available; and
• 45 percent of the established
price to producers for crops that
could have been insured but were
not.
The statute requires 2001 and
2002 crop disaster payments for
production and quality losses to
be calculated by the same formu
la and loss thresholds used for
the 2000 crop disaster program.
This means the prices used to cal-
can’t be justified.”
Crone cautioned that rural
businesses and communities will
lag behind suburban and urban
areas in economic development
unless measures are taken to pro
vide greater access to telecommu
nications technology.
Speaking on behalf of the
Pennsylvania Farm Bureau,
Crone called for passage of
House Bill 1669, which is spon
sored by Rep. Brett Feese (R-Ly
coming). The legislation would
strengthen local telephone com
petition for affordable rates and
motivate- telecommunication
companies to more rapidly ex
tend systems to rural areas. The
measure would also establish a
Lancaster Farming
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culate disaster payments for
crops insured under the Federal
Crop Insurance Program will be
the Actual Production History
(APH) prices. For crops not in
sured, five-year average market
prices will be used.
The statute also requires the
2001 or 2002 crop disaster pay
ments be reduced if the sum of:
the disaster payment; the net
crop insurance indemnity; and
the value of the crop that was not
lost, exceeds 95 percent of what
the value of the crop would have
been in the absence of a loss. Pay
ments will be made to producers
shortly after sign-up begins.
For more information about
CDP and other disaster assist
ance, contact your county FSA
office.
telecommunications fund for
grants to local communities and
provide for automatic enrollment
in “Lifeline”, ensuring access to
life-saving phone services
throughout Pennsylvania for low
income residents.
“We believe that passage of
House Bill 1669 will significantly
increase the chances that Penn
sylvania’s rural businesses,
schools, hospitals and homes will
not be left behind in today’s in
formation age,” Crone con
cluded.
Crone and her husband Rich
ard, with other family members,
operate Pine Hurst Acres, a 2,500
acre livestock and grain farm
near Danville.
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