Pennsylvania lawmakers want state milk premium shown to producers

SALEM, Ohio — Pennsylvania dairy farmers could potentially see more money in their milk check if a bill moving through the state legislature is successful.

H.B. 1265, which would require more transparency in how premiums for milk sold within the state is reported, was passed by the Pennsylvania House Dec. 7, by a vote of 101 to 95.

Sponsored by Rep. John Lawrence, R-West Grove, the bill would require milk dealers, in addition to milk cooperatives who sell farmers’ milk, to provide the farmers a written statement “of the specific dollar amount of state-mandated premium included in the payment for milk.”

Milk premiums

In Pennsylvania, dairy producers are awarded something called the “over-order premium,” or a state-based incentive for milk that is produced and sold within Pennsylvania. The premium was established in 1988, by the state’s Milk Marketing Board, and currently provides Pennsylvania farmers an additional $1.85 per hundred pounds of milk, or about 16 additional cents per gallon.

But according to Lawrence, and supporters of his bill, current law allows milk cooperatives to forgo the reporting to farmers, because cooperatives are considered milk “producers.”

His bill seeks to fix that by defining dairy farmers as the producers of milk, and requiring the same reporting requirements for milk-selling cooperatives, as those entities defined as milk dealers.

“The pennsylvania dairy farm deserves to know what’s in its milk checks,” Lawrence said.

He said the intent of the over-order premium is to offer additional support for Pennsylvania dairy producers, and ensure a steady, reliable source of local milk. But because cooperatives are not held to the same standards as milk dealers, it’s unclear how much of the premium is actually going to producers, or potentially leaving the state.

Opposition

One of the largest dairy cooperatives in the state, Dairy Farmers of America, opposes the bill, saying that it is unnecessary and would “disrupt the way we pay our members and change the way we conduct business.”

Bill Beeman, a Pennsylvania dairy farmer and co-chairman for DFA’s Northeast Council, testified in June, that DFA collects this and other premiums, including premiums for out-of-state sales. He said the premium in question applies to less than 15 percent of DFA’s Pennsylvania-member milk.

The organization then combines all of the premiums, “and after marketing expenses, pays all the money to members in the form of market-driven premiums, which include premiums for quality, volume and for not using rbst.”

Beeman said that Pennsylvania Milk Marketing Law, as well as federal law, allows cooperatives to blend the proceeds of all sales and make payments to farmers, as determined by the farmer-members in their cooperative agreement.

Market balance

DFA further argued that it acts as a balancer of excess milk in the market, finding markets during the ups and downs of the week, and that tracking the milk shipments of its 1,500 Pennsylvania members to determine the over-order amount, would be burdensome and costly.

The bill is co-sponsored by more than 20 House members, and is expected to be taken up by the Senate.

Lawrence has been working on the bill for about five years. He said his main interest is making sure that the state-mandated premium actually goes to the state’s dairy farmers, and that they’re provided written proof.