After reviewing the special hearing on the problems with the dairy industry, which was conducted by the Dairy Subcommittee and chaired by Sen. Gillibrand (D. NY), without any reservation it must be …
After reviewing the special hearing on the problems with the dairy industry, which was conducted by the Dairy Subcommittee and chaired by Sen. Gillibrand (D. NY), without any reservation it must be said that Sen. Gillibrand deserves an A+ for the manner in which she conducted the hearing.
Sen. Gillibrand made it very clear with her opening remarks that she is very concerned that dairy farmers are not receiving a pay price to allow them to cover their costs of production. I felt that the senator was even leading some of the people testifying, to make sure the full subcommittee understood the importance of covering the dairy farmers’ costs of production to the full subcommittee.
It appears that the people who testified didn’t suggest any way to increase prices paid to dairy farmers. Some of them even testified that dairy farmers have different costs of production so we can’t use their costs to price milk. Do these people recognize that 70 percent of the milk that is used to manufacture dairy products is the same price in all federal milk marketing orders? In addition, the Economic Research Service reports that the national cost of production is $22.37 per CWT [per hundredweight].
So we have an established price for milk used to manufacture dairy products and an established cost of production, but they don’t relate to each other. Therefore, dairy farmers are losing approximately $5.00 per CWT below the average cost of production under the existing system. So why can’t the cost of production formula be used?
Another point is that some of those testifying had little knowledge concerning the “make allowance” that is removed from the pricing formula and is given to the manufacturers of dairy products; they receive at least $2.50 per CWT credit to cover their costs. The dairy farmer gets nothing. Neither do the bottlers of fluid milk.
Why not give the dairy farmers the same opportunity that the processors have?
Again, Sen. Gillibrand deserves a lot of credit for the manner in which she ran the hearing. However, I see very little, if any, improvement in prices paid to dairy farmers coming from this hearing.
In addition to Sen. Gillibrand’s efforts to addressing milk pricing, Sen. Dr. Roger Marshall (R-KS) emphasized the need to get whole milk back into our children’s schools and was endorsed by another committee member. This was an unexpected and welcome surprise.
Arden Tewksbury is the manager at the Progressive Agriculture Organization.
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