Dairy industry groups will ask the Pennsylvania Milk Marketing Board next week to maintain the over-order premium at its current level.
In written testimony submitted for the Sept. 1 hearing, the speakers say the premium will help dairy farmers who are facing high feed costs and other concerns.
Matthew Espenshade, a dairy farmer representing the Pennsylvania State Grange, said the price for a load of feed for lactating cows has risen $1,000 this year. Over the same period, his cooperative’s pandemic-related base excess program has reduced his income by $6,600, he said.
David Graybill, a farmer representing Pennsylvania Farm Bureau, said he’s hoping good harvests this year will minimize his need for purchased feed.
Farmers could use a steady or rising milk price to rebuild their finances after several years of upheaval, but from what Graybill has read, he’s not sure they will get that.
Wayne Brubaker, a senior accountant for Farm Bureau’s MSC Business Services, said dairy farms are generally in a better financial position than they have been in several years. But the above-average feed prices and the end of federal pandemic aid will reduce margins.
“Combined with milk prices that are relatively flat, present industry conditions create an environment where continued financial support is needed for dairy farmers,” Brubaker said.
The Pennsylvania Association of Milk Dealers said it did not oppose continuing the premium at its current level.
After reviewing the testimony, the board will set the premium for the six months beginning Oct. 1.
The over-order premium is paid to farmers on fluid milk that is produced, processed and sold in Pennsylvania. On top of the per-hundredweight payment, it includes a fuel adjuster that moves with the price of diesel.