If we want to help dairy farmers, we must floor all classes of milk
Before I start we all must be mindful and prayerful in support of the families that have lost loved ones to this new terrible virus.
Recently, the Pennsylvania Milk Marketing Board (PMMB) passed another motion placing a new premium on bottled milk in Pennsylvania. Whenever the Class mover falls below $15 per cwt. (hundred pounds) then an automatic premium will be kicked in, making up the difference between the $15 and the announced Class I mover. Currently that difference is $2.05 per cwt. This amount will vary each month.
The big question is, “Will the dairy cooperatives be willing to remit in full the amount of the premium to their members?” I want to commend the PMMB for one more time, doing the right thing.
Remember, the Pennsylvania handlers pay their producers in accordance with how the processors market their members’ milk. This is different from the Federal Milk Marketing Orders.
There is even a more serious problem. As I went over several newspapers and farm papers, I found one article in one paper that urges everyone to contact the dairy division of the USDA and ask them to implement a $15 floor on the Class I mover in the Federal Orders, as was done by the PMMB. This request appears to be spearheaded by a group of several dairy co-ops in the southern part of our country. However, even more confusing is when an unnamed person that is associated with the movement said, “The idea is not to generate more money for dairy farmers, but to tourniquet the bleeding.” And I say, “Really?”
Let’s look at some figures: Supposing the Class I premium reaches $3 per cwt. We are estimating that the statistical price in Federal Order #1 in May will be around $12.34 per cwt. This figure will be close, but until the prices are announced for Class 2, 3 and 4 in early June, one can’t be sure of our estimate, but we will be close.
If the Federal Order premium reaches $3 per cwt. how will this $3 affect the price dairy farmers in Order #1 receive? As I said before, the Federal Milk Marketing Orders are market-wide pools. The Class I utilization in Order #1 is hovering around 30%. Some say this can go lower. We estimate the pay price for dairy farmers in May will be $12.34 per cwt. Dairy farmers actually will receive 30% of the $3 premium not $3. So you add 90 cents to the $12.34 price, which means the pay price will be $13.24 for May’s milk, approximately.
We have members that will have $3 per cwt. removed from their milk checks. What do you want? A price of $12.34 minus $3, representing a pay price of $9.34 per cwt., or $13.24 per cwt. minus $3, or $10.24 per cwt.
You cannot function with any of these prices. Forty years ago in 1980, the average price for Federal Order #1 was $13.03 per cwt. In Order #2 in 1980 it was $12.61. We have different ideas how to solve the problem. The answer is available; there is no reason why the value of manufactured milk in our Federal orders can no longer be considered a “sacred cow.” We must increase the value of milk used for bottling, and we must increase the value of milk used for manufacturing dairy products.
You can review our proposal; the Dairy Farmers' Survival and Hope Act, on our Facebook page “Progressive Agriculture Organization.”
Pro-Ag can be reached at 570-833-5776.