I like to inform my readers about initiatives undertaken — or to be undertaken — by the Pennsylvania Milk Marketing Board, as well as things that are being done by MMB staff as part of our legislated duties.
Recently, the board received approval to implement the 90-day dealer termination notice, effective July 31. This change requires dealers to provide producers with a 90-day notice of contract termination instead of the previous 28 days.
The new regulation also contains a provision whereby dealers experiencing extreme financial hardship can apply for a waiver. The notification period would then change to approximately 45 days, based on time for staff reviews and communications. A rigorous, business-tested method has been adopted for evaluation of the dealer waiver application to ensure accuracy and fairness of the process to all parties.
Board staff is currently involved in conducting an in-store handling study, which has not been done for close to two decades, to determine the costs retailers incur to store and check out milk at the cash register. A sample of retail outlets in each of the six MMB milk marketing areas has been drawn and includes a representative group of chain grocery and convenience stores.
The study involves on-site visits to each participating retailer by staff auditors. Once all data are collected and analyzed, a hearing with testimony by staff and any interested parties will be held. Staff will make recommendations to the board regarding the appropriate in-store handling cost that should be included in board-established minimum retail prices.
Staff have been contacted about a review and revision to the pricing structure for milk sold to schools. Currently, prices for half-pint and other sales are based on the fat content in a process identical to that used to price milk sold to retail outlets.
We are looking into this issue. If it moves forward, it will require an individual, organization or business to petition the board for a hearing. If the board decides to hear the matter, testimony will be presented by the petitioner and others for board evaluation.
In a few weeks, we will begin the process of assembling documentation for a regulation change which will allow us to increase our fees by a small amount. As I have shared with readers, MMB does not receive any tax dollars for its operations. When milk revenues decrease, our revenues also decrease. In addition, we have some extremely expensive technology upgrades that must be done and there are concerns that our operations cannot continue effectively and efficiently without those upgrades.
Changes Brought on by Pandemic
Due to pressures created by the pandemic, we have taken measures to reduce our expenditures, such as reducing our Harrisburg office space by approximately 50% and not hiring replacements for retirees. We have, however, reached the point at which we can no longer absorb any more cost reductions.
The unfortunate aspect of our cost cutting has been a reduction of some services not required by legislation that we previously performed. Most concerning for us is that we have had to discontinue farm bulk tank calibrations, effective May 1 for cooperative members and Dec. 31 for all independent producers.
Our staff will also no longer be doing visits to farms to provide certification examinations for individuals who pick up milk. These services were previously done through an agreement with the Department of Agriculture and will be handled exclusively by that department as of July 1.
On a positive note, fourth quarter bids received for The Emergency Food Assistance Program, which we have had to monitor for six months due to Pennsylvania minimum price violations, were all submitted for at least the state minimums. We have high hopes that this issue has been dealt with successfully and that there will be no future disruptions in fluid milk going to our food banks and other milk distribution sites. Staff will continue to monitor the quarterly bids and awards as they are published on the USDA website.
PMMB is always available to respond to questions and concerns. I can be reached at 717-210-8244 or by email at email@example.com.