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PMMB Reduces Premium Paid To PA Dairy Farmers, Then Raised It

PMMB Reduces Premium Paid To PA Dairy Farmers, Then Raised It

Ag group criticizes Pennsylvania Milk Marketing Board's decision to reduce milk over-order premium by 15 cents for the first three months of 2013.

Last week, the Pennsylvania Milk Marketing Board reduced its Class I over-order premium for part of 2013, and raised it higher for another. The decision immediately met criticism by farm group leaders.

PMMB cut the premium by 15 cents per hundredweight to $1.80 for the January through March period. But it raised the premium to $1.85 per hundredweight from April through June. 

PMMB Reduces Premium Paid To PA Dairy Farmers, Then Raised It

Pennsylvania Farm Bureau immediately expressed concern over the decision. "We believe compelling evidence was presented to the board demonstrating the severe financial burden dairy farmers are experiencing because of extremely high production costs and shrinking profit margins," said PFB President Carl Shaffer. "The board already acted earlier this year to reduce the level of the producer premium. At this time, any further reduction in premium is unwarranted."

Testimony and data presented during a PMMB hearing earlier this month showed financial conditions for Pennsylvania dairy farmers have not improved as farmers continue to face serious economic challenges. Production costs, such as feed concentrate and soybean meal, have increased substantially compared to previous years.

Farm Bureau noted that PMMB has continued the current fuel adjuster add-on to the producer premium, established under a different pricing order. Over-order producer premiums mandated by PMMB are assessed on fluid (Class 1) milk that's produced, processed and sold entirely within Pennsylvania.

Pennsylvania is the fifth largest dairy producing state in the nation. It's also one of the few with over-order premiums on Class 1 milk, targeted for milk cartons.

Pennsylvania's Milk Marketing Board will continue its vital and stabilizing role, explains Board Chairman Luke Brubaker. "It ensures all segments of the industry receive an equitable price for milk, thus guaranteeing a continual supply of fresh milk to the citizens of Pennsylvania."

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