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PENNSYLVANIA FARMERS' ASSOCIATION URGES MILK MARKETING BOARD TO EXTEND CLASS I MILK OVER-ORDER PRICE FOR DAIRYMEN FOR ANOTHER YEAR

PENNSYLVANIA FARMERS' ASSOCIATION URGES MILK MARKETING BOARD TO EXTEND
 CLASS I MILK OVER-ORDER PRICE FOR DAIRYMEN FOR ANOTHER YEAR
 CAMP HILL, Pa., May 22 /PRNewswire/ -- The Pennsylvania Farmers' Association (PFA) today announced it is urging the Pennsylvania Milk Marketing Board (PMMB) to extend the $1.30 per hundredweight (cwt.) Class I milk over-order price for dairymen for another year.
 The over-order price, which was first established by the PMMB in September 1988 due to adverse weather, was extended in 1990 and 1991 and was increased from $1.05/cwt. to $1.30/cwt. in February 1992. It is scheduled to expire on June 30, 1992.
 At a PMMB hearing today in Harrisburg, Pa., spokesmen for the statewide farm organization testified that a combination of higher feed costs due to last year's drought, low milk prices, and larger USDA deductions, would continue to keep the return for the average dairyman below cost of production in the future. PFA urged the PMMB to extend the over-order price until June 30, 1993.
 Harold Shaulis Jr., a member of the PFA state board of directors and chairman of its Dairy Advisory Committee, told the Milk Marketing Board that an extension of the over-order price is "... necessary to the survival of the dairy industry in this state. It will serve to help those of us who have faced weather related forage problems for three of the last four years come a little closer to surviving another year."
 Relating his personal experience to the PMMB, Shaulis said that in normal weather conditions the forage supply harvested on his 255 tillable acres would provide about 5 percent more feed than needed for his 140-cow dairy operation near Somerset.
 But, as a result of past weather disasters and last year's drought, Shaulis had been buying about half of his daily shelled corn supply and is now purchasing the entire daily requirement. This additional daily expense averaged $69.50 per day from Nov. 1, 1991, through March 1992, increased to $129 per day in April, and then to $137 per day in May. "These costs will remain in effect until November 1992, when my new corn crop will be harvested," Shaulis said, "assuming we have a normal year."
 Shaulis told the PMMB that the over-order premium in effect since September 1988 and the increase in February 1992, "have been critical to my staying in business. That $1.30 premium on Class I milk means about $40 to $45 per day to me in income while adding only about 11 cents to the price of a gallon of milk in the store."
 The over-order premiums in effect for the past three years, " ... have not created an oversupply of milk or an increase in the number of dairy farms or milking cows in this state," Shaulis testified. "The numbers show less dairy farms, less cows, and a relatively stable production trend. The resulting price increases on milk have not shown a significant loss of sales to out-of-state dealers, or lower sales."
 PFA dairy specialist Mel Eckhaus provided additional testimony. He told the PMMB, "We believe it is clear that the average Pennsylvania dairy farmer's costs are not being met by prices received. The cost of production was $13.10 per hundredweight in 1991, compared with the price received of $13.00, not including USDA deductions." PFA's cost-of- production and price-received figures were supported by testimony from Mark Hudson, a statistician for the Pennsylvania Agricultural Statistics Service, and Dr. Steven Ford, an assistant professor of agricultural economics at Pennsylvania State University.
 Eckhaus testified that the 1991 drought has increased costs so far in 1992 by 16 percent for purchased feed and 27 percent for hay. The USDA budget reconciliation assessment on dairymen has also increased from 5 cents per cwt. in 1991 to 13.65 cents in May 1992, and marketing and promotion deductions continue at 15 cents. Meanwhile, dairy prices are expected to increase and end the year about $1 above 1991. But, Eckhaus testified, "We do not believe that expected increased prices in 1992 will meet ... increased costs." In addition, he said, "The current over-order price has not caused adverse effects on the marketing of milk."
 Berks County dairyman David Hartman also testified for PFA, telling the PMMB, "Over the past five to 10 years, virtually all production costs have gone up. Everything from labor to equipment to taxes and insurance has increased several times," while the net price received for milk on his farm is now $12.35/cwt. after deductions -- actually less than the $12.40 blend price received in February 1979. "The only way dairy farmers have been able to offset these high costs is through increased efficiency and production," Hartman said, but expressed concern about how much further efficiency can be increased.
 "At times, I feel uneasy coming before this board, as though for some reason we are not running our business properly and can't get along without your help," Hartman told board members. But, he said, "I have come to realize one of the only ways to bargain for a higher price for our product is through the PMMB. I feel over the past several years, the over-order premium provided by the PMMB has been the only factor keeping many dairyman in Pennsylvania from failing."
 PFA is a voluntary, general farm organization representing 23,049 families in 61 of Pennsylvania's 67 counties. Just over one-half of PFA members are dairy farmers.
 /delval/
 -0- 5/22/92
 /CONTACT: Janet B. Carson or Wilson Smeltz of the PFA, 717-761-2740/ CO: Pennsylvania Farmers' Association; Pennsylvania Milk Marketing
 Board ST: Pennsylvania IN: SU:


CC-JS -- PH012 -- 3323 05/22/92 12:43 EDT
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Date:May 22, 1992
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