As Paul Harvey would say: Here is the rest of the story
Many people are happy to see that in Federal Milk Marketing Order Number One, the amount of milk used in Class I was 35% of the market.
However, that doesn’t tell the whole story.
1) There was less milk pooled in Order One because there was one less day in June as compared to May. This means somewhat less milk in the pool.
2) We know there was a substantial amount of milk that was used for manufacturing purposes that was depooled. The co-ops did this because the Class III price was $21.04 per cwt.. When this milk was taken out of the pool, it meant that dairy farmers were cheated out of receiving a better total price for Class III sales.
When you couple this with a Class I price of $14.67 per cwt. this illustrates why the dairy farmers’ price does not go up as it should. It seems to me that the Market Administrator’s office should be able to report how much milk was depooled. I’m not saying we should necessarily know who depooled milk, but we should know how much was depooled. It does have a real effect on prices received by dairy farmers.
While it’s nice to have a 35% utilization for Class I milk, the truth of the matter is one must look at how much milk there was in Class I. Actually, there was nearly 40 million pounds of Class I milk used in June as compared to May’s consumption.
While the percentage was higher, there still was less milk used in Class I in June as compared to May, which resulted in holding down the price to our dairy farmers. Even so, the blend price paid to dairy farmers came in at $15.66 per cwt..
While this is a $2 improvement over May’s milk, it still leaves our dairy farmers’ price substantially below the national average cost of producing milk. As Paul Harvey would say, there is more to the story.
Looking ahead with the Class I price for July at $19.81 per cwt., and if the value of Class III milk remains anywhere near the June’s level, and if there is less milk depooled in July, the farmers will see a much better price for July’s milk. This will be announced on August 13. Remember, this could happen, but there are several ifs and buts.
3) Anyone and everyone should be credited for their efforts to continue to push whole milk. However, I visited several stores during the last few weeks, and I’m shocked at the increase of imitation dairy products in most stores. The store I see still selling a substantial amount of whole milk is Bill’s Shoprite in Daleville, Pennsylvania (Lackawanna County). Yes, they still have 22 rows of whole milk. Thank you, Bill!!
Another thing that bothers me is that many years ago, the fluid milk handlers agreed to a resolution or a law which allows or compels fluid milk handlers (at least in the Federal Orders) to add 20 cents per cwt. onto their selling price in the stores. Remember, this does not come off of the dairy farmers’ value.
Can you imagine the amount of money that this must generate? The money is supposed to be used for advertising and promoting fluid milk sales. Are these milk handlers being audited on this money? Is this money really being used to promote fluid sales? It’s time that this program be looked at and determined if this program is really helping fluid sales of milk.
Tewksbury is manager of Pro-Ag can be reached at 570-833-5776.