Pennsylvania Farm Bureau (PFB) expressed concern over a decision by the Pennsylvania Milk Marketing Board (PMMB) to reduce the Class I over-order premium price for milk for the six-month period beginning January 1, 2013. The board decided to decrease the premium by 15 cents per hundredweight to $1.80 for the three-month period of January through March, and then increase the premium to $1.85 per hundredweight from April through June.
"We believe compelling evidence was presented to the board demonstrating the severe financial burden dairy farmers are experiencing because of extremely high production costs and shrinking profit margins," said PFB President Carl T. Shaffer. "The board already acted earlier this year to reduce the level of the producer premium. At this time, any further reduction in premium is unwarranted."
Testimony and data offered by PFB during a PMMB hearing in December showed financial conditions for Pennsylvania dairy farmers have not improved, as farmers continue to face serious economic challenges. Production costs, such as feed concentrate and soybean meal, have increased substantially compared to previous years.
Farm Bureau noted that PMMB has continued the current fuel adjuster add-on to the producer premium, established under a different pricing order. Over-order producer premiums mandated by PMMB are assessed on fluid (Class I) milk that is produced, processed and sold entirely within Pennsylvania.
Pennsylvania is the fifth-largest dairy producing state in the nation.