milk in grocery store

Well, my opinion about recent actions toward elimination of the over-order premium and minimum wholesale and retail pricing are out in the open.

Today, I present my thoughts on the rhetoric we are hearing about these proposed eliminations versus what I believe are the realities of the situation.

First, a little background on what has me thinking about these things, which I see as one set of realities.

A Forbes magazine article from late 2020 indicated Pennsylvania ranks 12th in states losing population. In fact, you probably know we have lost a congressional district, which also means we are losing an electoral vote.

What is confusing is that we actually had a 2.4% net population increase to 13,002,700 since the previous census, but our growth relative to other states was much lower. There are only 435 seats in the House of Representatives, and they are apportioned by population.

In a time when the dairy industry in our state continues to struggle on many levels, we should be focused on proactive solutions to counteract these demographic trends — and yes, this population thing is a trend.

Census 2020 marks the 10th decade in a row that we have lost clout in Congress even while “inching up” to being the fifth most populous state. It is the relative high growth of other states that hurts us.

We are seeing some increases in overall milk production in the commonwealth, and I have strong beliefs that we need additional processing capacity, specifically an ultrafiltered milk processing (or cheese/yogurt manufacturing) plant. With less population and the general trend across the country to consume less fluid milk, will our milk excess be directed to fewer and harder-to-find markets than we have today?

At present, about 60% of our fluid milk production is shipped out of state. And we recently learned of a processing plant closure that will affect over 100 Pennsylvania dairy producers who are scrambling to find a replacement market as I am writing this column.

Can their milk be absorbed by the state’s already limited processing market? Or will they either settle for a market they do not wish to have or be forced to go out of business?

What do I see as the rhetoric surrounding these circumstances? Since my article came out on the over-order premium and pricing elimination push, a lot of people are talking about what a low probability it is that the OOP or minimum pricing will ever be eliminated — “There is not enough support for that” or “a legislator might move a bill on that, but it would never pass the General Assembly,” and “It would never work because independent farms and processors would rise up to stop it as a group.”

That is the rhetoric.

What is the second set of realities?

We do not currently have any Pennsylvania dairy-related organization willing to petition the board to hold an over-order premium hearing prior to the current OOP rate’s expiration on March 31.

Oh, there might be an organization or individual that comes forward by the time this article reaches publication, but time is a factor. You see, hearing notices have to be published a certain amount of time prior to a hearing being held, and notices must be provided to interested parties. And the board has to approve the hearing date prior to any of that happening.

What happens if there is no hearing and a new OOP is not established by the board? The OOP goes away, plain and simple, and that extra monthly income that many farmers depend on will be gone.

Wouldn’t it be more productive and beneficial for all the industry stakeholders — state government, cooperatives, independent processors, producers, consumer groups — to collaborate on how to plan for our state’s demographics and the labor and market changes that come with those? Does fighting among ourselves really accomplish anything?

Will elimination of the OOP really accomplish anything for the industry?

The board has been saying for several years now that the better solution for dealing with OOP issues is to have a replacement for it in place before it is eliminated, but that would require a serious sit-down around a table that involves meaningful discussions (with little or no grandstanding).

We started discussions many months ago to work toward an alternate source of revenue that would be paid directly to Pennsylvania producers. While that idea is not dead, it is moving forward very slowly.

There are realities we need to face. Loss of population (which means loss and change of available workforce), slightly higher milk production with fewer choices of markets, declines in fluid milk consumption — some tied to population changes — and tremendous need for investment to increase processing capacity. This is while we still maintain the second largest number of dairy farms.

I am crossing my fingers that those who propose elimination of the OOP can take a step back, take a deep breath, and come to the table to help develop alternative methods for getting more money into farmers’ pockets.

Getting rid of the OOP without an alternative in place is not the answer to our realities and what they create for the industry.

The Pennsylvania Milk Marketing Board is always available to respond to questions and concerns. I can be reached at 717-210-8244 and by email at chardbarge@pa.gov.

Lancaster Farming

Carol Hardbarger is the secretary of the Pennsylvania Milk Marketing Board.

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