Charles Seidel, a dairy farmer from Berks County, testified today before the Pennsylvania Milk Marketing Board (PMMB) on behalf of the PA State Grange.  He informed the PMMB that the Grange is asking to have the over-order premium set at $1.80 per hundredweight.

Mr. Seidel milks 50 registered Holstein cows and farms 120 acres on his Berks County farm.  He told the Board that he ships 2,500 pounds of milk per day with a herd average of 18,000 pounds per cow.  He said that, “Because my milk is produced, processed, and sold in PA, I directly receive the PA Milk Marketing Board over-order premium.”

Charles told the board, “If you remember, last May I testified before you and asked the Board to consider an over-order premium of $1.95 per hundredweight. While we still feel that the $1.95 is justified, we acknowledge your concerns about marketing and milk supply.”  Continuing, he said, “As a result, the Grange believes $1.80 per hundredweight is a compromise that addresses the concerns of all interested parties.

He stated that, “It is projected that retail milk prices will drop in August about 28 cents per gallon from July and 56 cents from June.  This drop is a result of a new balance between supply and demand.”  He explained this by saying, “As the cow numbers fell in the spring milk supplies tightened and prices rose.  The recent price drop is a result of the supply/demand adjustment which has now been completed.”

“Milk production costs continue to rise,” said Seidel.  “The National Agricultural Statistics Service Special Dairy report released in July 2004 shows that production costs have risen 3.3 percent since June 2003.  Fertilizer, seeds, and spray costs have also increased.”   And he noted that, “As always, my fixed costs continue to increase such as insurance premiums and taxes.” 

Mr. Seidel said that, “The media continues to harp on retail milk prices, but they never give the consumer the complete picture.  They reported the high price of milk in May and June, but conveniently forgot to mention that the price has dropped significantly since then.”  He added, “They also have not mentioned that the dairy farmer’s net income has dropped in proportion to the retail price drop.”

In referring to the recent high milk prices he said, “Two months of high milk prices do not balance two years of low prices.  Many dairy farmers are still feeling that they are just digging the hole deeper and finding it harder and harder to climb out.”  He went on to say, “Yes, we did have a short blip of increased milk checks.  But those good days are numbered and we are back to the same old story – dairy farmers losing money on a daily basis and struggling to survive.”

Seidel told the Board that, “…the long-term silver lining is the over-order premium that  you have instituted and continue to provide to PA’s dairy farmers. We are thankful that you as a Board exist and that you are able to directly or indirectly help PA’s dairy industry.”

Mr. Seidel closed his testimony by saying, “Again, the Grange strongly urges you to raise the current over-order premium to $1.80 per hundredweight.  Thank you for your consideration.”

The Grange is a family fraternal organization dedicated to the betterment of rural America through community service, education, legislation and fellowship.  It is the oldest agricultural organization of its kind in the United States. The National Grange (Patrons of Husbandry) began in 1867.