Got transparency? Pennsylvania’s process of pricing milk and paying dairy farmers could use more of it

These dairy farmers say they lack representation in the milk cooperatives that are assuming control of dairies and milk processors. The cooperatives deduct the costs of marketing and milk transportation from dairy farmers’ checks without itemizing those deductions to the farmer. These officially nonprofit entities also have voting rights on how milk pricing is set, Crable reported, while individual farmers don’t.

Milk, the old marketing slogan asserted, “does a body good.”

For Plain sect farmers, milk also used to be good business.

Now, some of them aren’t so sure of that. Some are considering getting out of the dairy business.

Which would be a shame for them, and for Lancaster County, Pennsylvania’s top dairy-producing county, because a lot of that production has come from Plain sect farms.

Milk consumption has declined in recent years; indeed, according to the U.S. Department of Agriculture, Americans are drinking 40 percent less milk than in the 1970s.

Cow’s milk has ceded space on the grocery shelves to almond milk, rice milk and soy milk — products that technically aren’t even milk, which is defined by the FDA as “the lacteal secretion, practically free from colostrum, obtained by the complete milking of one or more healthy cows.” (It doesn’t sound delicious, but it is.)

It’s not the decline in milk consumption, however, that has Plain sect and some other local dairy farmers upset. It’s what they see as a lack of transparency about how milk prices are set in Pennsylvania, and the lack of transparency required of cooperatives regarding the process of returning “milk money” to farmers.

Local dairy farmers also told Crable that cooperatives are encouraging more milk production — at the expense of dairy farmers, who suffer when prices drop during a glut.

In Pennsylvania, the price of milk is controlled by the Pennsylvania Milk Marketing Board.

As Crable reported, “Only in Pennsylvania do consumers pay a surtax of 17 cents per gallon on drinking milk. It has been as high as 28 cents and makes the cost of milk in Pennsylvania among the highest in the nation.”

Which is crazy because so much milk is produced here. Crazier still is the reality that out-of-state milk producers don’t have to pay the premium, but can sell their milk in Pennsylvania at top price.

That milk tax — or premium — “raises from $30 million to $50 million the yearly revenue that is supposed to go back to dairy farmers and keep them in the black during tough times,” Crable reported. “But some local farmers complain the money is eaten by large, corporatelike cooperatives that do not always return the money to member farmers.”

“Some do. With some it’s questionable,” state Rep. John Lawrence, who represents parts of Lancaster and Chester counties, told Crable.

In 2015, Lawrence introduced a bill that would have required more transparency from dairy cooperatives on what they are doing with the milk money collected from consumers to benefit farmers. It was his third attempt at such a bill, and it died last year in the Senate without being put to a vote.

All of the county’s legislators supported it, but it was opposed by dairy cooperatives.

It ought to be resurrected. And the General Assembly ought to pass it. Because right now, the milk money allocation process seems to us to have all the transparency of a glass of whole milk.

Not everyone is unhappy with the way the system is working.

Justin Risser, a dairy farmer from Elizabethtown and past president of the Professional Dairy Managers of Pennsylvania, told Crable that cooperatives aren’t in it for the money.

“Farmers think they are taking a lot out of their milk checks, but cooperatives have to,” he said. “When they have an expense such as overproduction, they have to take that expense out and pass it around to every member of the cooperative.”

And Luke Brubaker, chairman of the Pennsylvania Milk Marketing Board and patriarch of the large Brubaker Farms dairy operation in Mount Joy, told Crable that the system in Pennsylvania is “great” and “benefiting most farms and also is benefiting the dairy industry of Pennsylvania.”

He and Risser may be right. Some local dairy farmers may be blaming their business woes on factors outside of the control of the cooperatives.

This is why more transparency is needed. It would benefit both the small dairy farmers and the cooperatives themselves. It would reassure everyone that the system in Pennsylvania is working for the benefit of all the players involved — including consumers.

Additionally, we hope that Pennsylvania Auditor General Eugene DePasquale has the resources soon to review the Milk Marketing Board, as state Sen. David Argall of Berks and Schuylkill counties has requested.

Accountability and transparency would do everybody good.


Source: Lancaster Online


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