Farm groups are asking for Pennsylvania’s key milk premium to remain at $1 per hundredweight.
“I hope you will continue to recognize the plight of our farmers,” dairy farmer Matt Espenshade said in written testimony to the state Milk Marketing Board.
On Wednesday, the board heard testimony to set the over-order premium from October 2019 till March 2020.
The premium — paid on fluid milk that is produced, processed and sold in Pennsylvania — was raised to $1 per hundredweight this spring and is supplemented by a 12-cent fuel adjustment.
Dairy farmers continue to face grave financial challenges, said Michael Volinskie, manager of MSC Business Services, the Pennsylvania Farm Bureau’s member services arm.
Between 2011 and 2018, the corporation’s client dairies had average net earnings of just $1,400 per year. And 2018 marks the fourth straight year that the average dairy client failed to turn a profit.
“At risk of stating what should be very obvious to the board, these are not financially sound financial numbers for Pennsylvania dairy farms,” Volinskie said.
Low milk prices have been exacerbated by last year’s wet weather, which left many farmers with shortages of high quality feed for their lactating cows.
Espenshade, a Lancaster County dairy farmer speaking for the State Grange, has made several changes to his ration to get the cows fed and save money.
Creatures of habit, the cows responded with reduced milk and component production, he said.
Still, Somerset County dairyman Glenn Stoltzfus thinks conditions are improving slightly.
His income over feed cost has been higher each month this year than it was in the same month in 2018. In June, the increase was $1.70 per hundredweight.
As a result, Stoltzfus — the chairman of Pennsylvania Farm Bureau’s dairy committee — has been able to hire additional workers and make some long-needed repairs, though he’s still not where he wants to be.
“The modest but steady increase in recent producer prices helps me see there’s possibly a positive light at the end of (a) very dark tunnel for Pennsylvania dairy farmers,” Stoltzfus said. “But we’re not through the tunnel yet.”
The over-order premium helps farmers close the gap between their milk check and their cost of production, and it can help farmers negotiate premiums with out-of-state processors, which aren’t subject to the fee, said Arden Tewksbury, manager of the Progressive Agriculture Organization.
“In my opinion, the (over-order) premium will continue to be necessary until our elected officials decide to take appropriate actions to correct the pricing inequities for all of our American dairy farmers,” Tewksbury said.
Dean Ellinwood, chairman of the Pennsylvania Association of Dairy Cooperatives, said he’d like to request a premium increase for farmers, but the board must be wary of raising prices too much. That could encourage processors to bring in milk from out of state.
The Pennsylvania Association of Milk Dealers said it does not oppose the premium remaining at its current level.