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On June 2, 2017 the dairy division of the USDA received our petition asking for a milk hearing to consider eliminating the present pricing system used to price milk to dairy farmers. In its place we strongly urged the USDA to consider a pricing formula that considers the dairy farmers’ cost of production.

However, despite thousands of petitions signed by consumers and dairy farmers, along with support letters from county commissioners as well as support letters from various national and state farm organizations, the USDA has turned down our request at this time.

At this time, I want to publicly thank the people who helped us. First, a big thank you to the members of Pro-Ag and many other dairy farmers from several different states that gathered hundreds of petitions. 

In addition we had letters from the county commissioners from eleven counties of Pennsylvania: they were Clarion, Jefferson¸ Bradford, Lycoming, Union, Sullivan, Wyoming, Susquehanna, Wayne and Pike.  Also one from Chenango County¸ New York, and a support letter from the Treasurer office of Jefferson County. Also support letters were received from the Pennsylvania Farmers Union, Pennsylvania State Grange, and from the Susquehanna County Farm Bureau and the New York State Grange.

A very important letter was submitted by the Tioga County Development Corporation. (Don’t confuse this Corporation with the County Commission.)

On the national scene, a support letter was submitted by the Family Farm Defenders of Wisconsin.  In addition, letters were received from the Food and Water Watch group of Washington, DC.  Also, the National Grange was one of the early supporters along with the National Family Farm Coalition. Both organizations are based in Washington DC. Here is the big one:  Willie Nelson’s National Farm Aid signed a support letter!

On the flip side, two national farm organizations refused to participate. One would think all of this support would convince the USDA that something is wrong on the way milk is priced to dairy farmers.

The real clincher should have been when I used the USDA’s figures for pricing dairy farmers’ milk in the 10 Federal Milk Marketing Orders for 2016. The weighted average of the 10 Federal Orders using the present pricing formula gave dairy farmers $15.38 per cwt. However¸ using the USDA’s figures for the national average cost of producing milk came in at $21.87 per cwt.  

This means the average dairy farmer was short-changed $6.59 per cwt. Collectively this means the total loss to dairy farmers in 2016 was approximately 13 billion dollars of needed income. Using a multiplier of five means the rural economy lost at least 65 billion dollars in 2016. Not our figures but USDA’s. Wow! What’s wrong with this picture? You tell me!

Now here is a real kicker. I might not have these figures correct, but I think they are near enough to make dairy farmers very upset. Written into the present pricing formula is called a make allowance for processors that manufacture dairy products. This figure averages nearly $2.50 per cwt. on manufactured dairy products that are sold onto the market.    

However, I understand that in some way this $2.50 (or whatever it is) is subtracted from the price that dairy farmers should be receiving in their pay price. I understand this make allowance in all probability enables the manufacturers of dairy products to cover their cost. Of course they should have that opportunity when they sell their products on the market.

There is no make allowance on Class I milk (bottlers of milk). Oh, by the way, I see in many stores where America cheese is selling for $6.99 a pound.

The USDA letter said they were denying our petition for the present time. Personally, I’m not giving up. The fight has just begun.  

Arden Tewksbury/Pro-Ag can be reached at 570-833-5776. 
 

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