HARRISBURG, Pa. — The Pennsylvania Milk Marketing Board is circulating an idea for a new premium that would go to all dairy farmers in the state.
The proposed payment would be collected by the state Revenue Department on dairy products such as cheese, ice cream and butter.
“As of right now, we’re just exploring,” said Rob Barley, the board chairman.
He explained the idea at Lancaster Farming’s Jan. 8 event “Inside the New Milk Marketing Board” at the Pennsylvania Farm Show.
The new premium is designed to address some of the shortcomings of the over-order premium, which is only for dairy farmers whose output is processed and sold as fluid milk within Pennsylvania.
Farmers miss out on the payment if their milk goes to a cheese or powder plant, or if it’s bottled outside the state.
To make matters more confusing, independent processors are required to itemize the premium amount on farmers’ milk checks, while cooperatives are not. That has left some co-op members wondering how much they really benefit from the premium.
“We have a system that’s certainly not perfect, like most government systems are not perfect,” Barley said.
The new premium would address one disparity by being paid to all Pennsylvania dairy farmers regardless of their milk’s end use.
The payment would be on a per-hundredweight basis, with possible adjustment based on farm size, Barley said.
Crafting the premium proposal has been difficult because of the maze of federal regulations that circumscribe the board’s power.
To meet these rules, for example, the premium collection and distribution systems would have to be managed separately, Barley said.
Though it’s working on a new farmer payment system, the board isn’t giving up on its existing one.
Imperfect as it is, the over-order premium has helped the state maintain its large number of independent processors and small dairy farms, Barley said.
The board started work last year on a regulation to require cooperatives to itemize the over-order premium, addressing a key farmer concern. But co-ops say implementing the change would be too costly.
The board is also supporting a bill, which unanimously passed the state House, that would allow the state to collect and distribute the over-order premium, making the system less reliant on co-ops and processors.
The proposed new premium would be paid in addition to the over-order premium, at least initially, Barley said.
The plan is still far from reality.
So far the board has sent a concept paper about the premium to the Department of Agriculture, House and Senate ag committees, and a few other key lawmakers.
The next step is to build legislative support for the idea, said Carol Hardbarger, the board’s consumer representative.
“We’d like to keep this (proposal) moving because the economic forces that have caused this four to five years of downturn are not going to go away,” said Jim Van Blarcom, a member of the Milk Marketing Board since 2014.
The proposed premium is one of the many projects the board has undertaken since Barley and Hardbarger were confirmed by the Senate in June 2018.
In “grueling” pre-confirmation interviews with the nominees, senators emphasized that farmers were dissatisfied with the board, Hardbarger said.
So the new board created a newsletter and social media presence, held listening sessions, and dug into regulatory changes that could help farmers.
“We can’t do things without legislation (in some cases), but we can speak out and get people engaged in talking about issues that need to be talked about,” Hardbarger said.
The full hour of Lancaster Farming’s wide-ranging panel discussion with the Milk Marketing Board is available at bit.ly/mmb-at-farm-show