Changes to over-order premium hit snag in Pa. Senate

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Holstein dairy cows
Farm and Dairy file photo.

A Pennsylvania bill to change the way over-order premiums work is hitting a roadblock in the state senate.

State sens. Elder Vogel, R-Beaver, and Judy Schwank, D-Berks, sent a letter Oct. 25 to the Pennsylvania Milk Marketing Board voicing their opposition to House Bill 224, which would give the Pennsylvania Milk Marketing Board power to coordinate the collection and distribution of the over-order premium, currently set at $1 per hundredweight.

The state senators are the chairs of the Pennsylvania Senate Agriculture and Rural Affairs Committee, where the bill now sits after being passed by the full Pennsylvania House in the spring. 

“It is alarming to us that the board believes the best manner forward is to quickly pass legislation that will provide the board with the authority to act unilaterally, without any legislative oversight,” the letter reads. “Moving forward, it is vital that we work together in a transparent manner on this matter and any proposed changes are vetted appropriately in a public forum.”

Under the current law, the board can only eliminate or continue with the current structure for collection and distribution of the premium. Processors and cooperatives forward the premium to their farmers. 

The bill would increase accountability and transparency in how the premium is paid and collected, according to state Rep. John Lawrence, R-Chester, who introduced the bill. Lawrence is also the vice chair of the House Agriculture and Rural Affairs Committee.

Background

The premium was set at $1.05 in 1988 to help dairy farmers deal with inflating inputs and low milk prices. It is built into the minimum retail price for milk, also set by the Pennsylvania Milk Marketing Board.

Whether the premium still works as intended or is still needed at all has been a hotly debated topic among dairy farmers and other groups for years. 

It culminated in August during an hours-long hearing hosted by the board in Harrisburg that saw testimony from dairy farmers, independent processors, cooperatives, lawmakers, the Pennsylvania Farm Bureau, the Pennsylvania State Grange and the state agriculture secretary.

Critics say the premium is unfair to farmers. Currently milk qualifies for the premium only if it is sold as a fluid product, and farmers have no control over how their milk is used. Additionally, only milk that stays in state for processing and retail sale is eligible.  This encourages farmers to ship their milk across state lines, critics say.

Proponents of the order say it is a helpful stopgap for farmers. Even if it doesn’t amount to that much overall, it’s better than nothing. Eliminating the premium suddenly without a replacement would hurt farmers. 

The Pennsylvania Milk Marketing Board held a special meeting Sept. 21 to continue its $1 premium for 90 days. The current over-order premium was set to expire on Sept. 30. 

The state senators implored the milk marketing board in their letter to continue the current over-order premium beyond Dec. 31 “until further examination and consideration may be made or it is anticipated that unintended volatility in the Commonwealth’s dairy industry could ensue.”

(Reporter Rachel Wagoner can be reached at 724-201-1544 or rachel@farmanddairy.com.)

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Rachel is a reporter with Farm and Dairy and a graduate of Clarion University of Pennsylvania. She married a fourth-generation beef and sheep farmer and settled down in her hometown in Beaver County. Before coming to Farm and Dairy, she worked at several daily and weekly newspapers throughout Western Pennsylvania covering everything from education and community news to police and courts.

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