Disappointment Over Stall On Milk Price Rise

US - Pennsylvania Agriculture Secretary Russell C. Redding has expressed disappointment over a federal court injunction that temporarily stalls a state order that would generate higher milk payments to the state's dairy producers.
calendar icon 23 September 2010
clock icon 2 minute read

The Milk Marketing Board order, which was set to take effect on Oct. 1, changes the way in which milk prices are calculated on certain milk produced, processed and sold in the state. This change was slated to bring an estimated $6.7 million in "stranded premiums" back to producers.

Stranded premiums refer to the portion of a 25-cent price retail customers pay on a gallon of milk that processors keep rather than returning to producers.

A US Middle District judge placed a temporary injunction on the order, saying the rule may cause financial harm to milk processors.

"I am extremely disappointed that Pennsylvania's dairy farmers may not receive the money owed to them for their milk, as determined by the Milk Marketing Board in June," said Mr Redding. "At a time when dairy farmers are struggling to make ends meet, this legal posturing is an unfortunate, but temporary, interference that hurts Pennsylvania's consumers and producers.

"The Milk Marketing Board's order is the right thing to do and provides true benefit to our 7,400 dairy producers. We must remain proactive in ensuring the largest sector of our agriculture industry remains viable today and in the years to come."

Under the Milk Marketing Board's June 2 ruling, a milk processor must pay the entire 25-cents-per-gallon charge back to the Pennsylvania producer regardless of whether that processor purchased milk from both in- and out-of-state dairy farmers.

Previously, the amount paid to producers was pro-rated based on the ratio of milk purchased from Pennsylvania producers compared to the total purchase amount, which included out-of-state supplies. For instance, if half of the milk a processor purchased is from Pennsylvania, the over-order premium obligation to those farmers is reduced by half. The other half is kept by the processor despite the Milk Marketing Law, which states it is to be given to producers.

The board's recent change in payment calculation came as a result of a petition filed by Governor Edward G. Rendell, Redding and the Pennsylvania Milk Marketing Board staff.

Governor Rendell and the Department of Agriculture have worked since 2006 to encourage the Pennsylvania Milk Marketing Board to actively use its full authority to influence price at the state level.

TheCattleSite News Desk

© 2000 - 2023 - Global Ag Media. All Rights Reserved | No part of this site may be reproduced without permission.