HARRISBURG, Pa. — A Lancaster County state lawmaker has introduced legislation to reform Pennsylvania’s milk marketing laws and close a loophole that prevents farmers from getting a share of designated premiums.
Sen. Michael Brubaker, a Lancaster County Republican, has drafted legislation that would reform Pennsylvania’s Milk Marketing Board. The bill is currently in the Senate Agriculture & Rural Affairs Committee.
Currently, Pennsylvania’s milk prices provide a built-in guaranteed profit for retailers and milk processors. The new legislation would also establish a profit for farmers, said Kristen Crawford, legislative director for Brubaker.
“Basically, it is a ‘share the pain, share the gain’ concept,” she said. “The dairy farmer should not bear the burden of the debt.”
Currently, Pennsylvanians pay a premium of 27 cents a gallon, a so-called over-order premium, for milk that is produced, bottled and sold in Pennsylvania. That money is supposed to go to Pennsylvania dairy farmers. However, some of that money is being “stranded” in the market place.
If milk bottlers move their milk across state lines for temporary storage, and then bring it back into Pennsylvania for sale, the premium is collected but not distributed to farmers.
Dennis Wolff, former Pennsylvania Department of Agriculture secretary, estimates that between $15 and $25 million in premiums paid in stores is not sent to dairy farmers.
“The bill is intended to update the milk marketing laws and ensure our farmers are getting all the support they are supposed to,” Crawford said.
The legislation would create a producer settlement fund, with each dairy farmer receiving a check based on the quantity of milk they sell in Pennsylvania, Crawford said.
Changing the over-order premium should not cause an uptick in prices at the stores since that fee is already paid by Pennsylvania consumers, she said.
The legislation could cause some Pennsylvania farmers to receive less money than they currently see in their milk checks, while other dairy producers could see an uptick, said Mark O’Neill, spokesman for the Pennsylvania Farm Bureau.
Despite that, farm bureau members have expressed their support for the Brubaker legislation and the attempts to reform milk marketing, he said.
Once milk leaves the dairy barn, farmers have no control over where their milk goes, and if it will be sold in Pennsylvania stores, or tuned into other products, O’Neill said.
But farmers are producing the same high-quality milk, so this legislation will return some equity to the market, he said.
“The over-order premium is something that Pennsylvania consumers pay and the thought behind it is that money is supposed to go to Pennsylvania dairy farmers,” he said. “We want to make sure our dairy farmers are getting what consumers feel they should be getting.”
However, state lawmakers are still examining particulars of the bill.
State Sen. Elder A. Vogel Jr., a Beaver County Republican who chairs the Agriculture & Rural Affairs Committee, is seeking opinions from a variety of stakeholders on the bill, said Michael Raider, who is executive director of the committee.
One of the largest concerns is the creation of the producer settlement fund, Raider said.
“We want to bring them in and hear their concerns, and try and sort this out and find the best fit for the entire dairy industry, which is tough,” he said.
Vogel, who is a dairy farmer, is also looking at the issue of premiums and how they become stranded in the market, Raider said.
“It is complicated, and we are trying to help the industry capture the premiums, but do it in a way that does not cause unintended consequences.”
But Cliff Hawbaker, a Franklin County dairy farmer and chairman of the Dairy Policy Action Coalition, said Pennsylvania farmers are only asking for the milk marketing laws to be brought up to date.
Over-order premiums need to go to the farmers because that was the intent of the legislation the created them, Hawbaker said. The milk marketing board is the vehicle to get that done, he said.
“We farmers need to stay engaged and informed,” he said. “It is our milk checks that we are talking about.”