Brand May Unstick 'Stranded' Milk Premium

6/15/2013 7:00 AM
By Charlene M. Shupp Espenshade Special Sections Editor

Giant Unveils PA Preferred Milk Label

HARRISBURG, Pa. — At one Pennsylvania grocery store chain, customers will know their neighbors supplied the store brand of milk.

The PA Preferred logo on the Giant Food Stores label will also ensure that the dairy farmers who produced the milk will be receiving the state’s over-order premium.

And for the state’s milk processors, it will mean a guaranteed outlet for Pennsylvania-produced and processed milk.

On Monday, Lt. Gov. Jim Cawley along with state Agriculture Secretary George Greig announced the launch of Giant’s PA Preferred milk label at a Harrisburg area Giant Food store.

“We want to put our Pennsylvania diverse agriculture on display year round, from the farm to the fork,” Cawley said.

He said Giant is the first national retailer to qualify for the PA Preferred program for its dairy brand.

“We are hoping everyone is looking for that blue keystone and gold check,” he said, referring to the PA Preferred logo.

“PA Preferred dairy products are fresh because they are produced locally,” Greig said. “When Pennsylvanians purchase PA Preferred dairy products, it makes a difference to local dairy farmers, processors — our friends and neighbors.”

Greig said dairy farmers are economic engines in their communities, spending 85 percent of their income locally.

“By strengthening the connection between agriculture and retailers, such as Giant, everyone from the dairy producer to the customer wins,” said Rick Herring, president of Giant Food Stores.

Harold Shaulis, a Somerset County dairy producer and chairman of the Pennsylvania Dairy Promotion Program, appealed directly to consumers to support PA Preferred milk.

“We are your friends, your neighbors, most importantly, we are dedicated to producing nutritious, good-tasting dairy products for everyone to enjoy,” Shaulis said.

“I think the PA Preferred, this is going to ensure customers locally produced milk,” he said. “It’s fresh as possible and the money is going back into the local economy. It’s a win-win for everyone.”

Giant credits the success of the PA Preferred program in its produce department for the decision to extend it to its store label milk.

Chris Brand, Giant’s public and community relations manager, said the chain’s customers know products with the label are fresher. For example, PA Preferred mushrooms can be on store shelves 36 hours after leaving the farm.

“There is an awareness of the consumer,” Brand said. “They want to know where things are coming from.”

Pennsylvania dairy farmers will also benefit from Giant’s decision because milk that is produced, processed and sold in Pennsylvania qualifies for the state’s over-order premium.

When milk is processed outside Pennsylvania and then returned for retail sale, the over-order premium is “stranded,” providing no additional income for farmers.

The over-order premium provides an additional $1.85 per hundredweight to the state’s producers, plus a fuel adjuster, through June 30.

“It’s a good thing for the dairy industry,” said Bob Schupper, Giant’s dairy category manager. “We don’t have to worry about stranded premium. Our consumers are paying that over-order premium.

“We are making sure that is protected, and it’s going back to where it belongs,” Schupper said. “Our customers are paying that money, and farmers should be the recipients of it.”

The level of over-order premium after June 30 is awaiting a decision by the Pennsylvania Milk Marketing Board. At the board’s hearing last month, processors complained that they are being shut out of new retail milk contracts and have lost one large contract as retailers opt to buy from out-of-state processors to avoid the premium.

Under the Rendell administration, there was a push to determine how much over-order premium was lost when Pennsylvania milk was processed out of state and then sold at Pennsylvania stores.

Giant label milk, in contrast, is processed by Lehigh Valley Farms in Lansdale, Pa.

Giant will sell its whole, 2 percent, 1 percent, and skim milk in gallon and quart sizes with the PA Preferred label. In addition Giant’s Pennsylvania stores, the milk will be sold at its stores in Maryland, Virginia and West Virginia.

According to Brand, the retain grocery chain sold 17.7 million gallons of milk in 2012.

Giant joins Schneider’s Dairy, based in Pittsburgh, which added the PA Preferred label to its milk in 2012.


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10/22/2014 | Last Updated: 11:16 PM