Charles Seidel, a Granger and a dairy farmer from Berks County, testified before the PA Milk Marketing Board yesterday and asked that the over-order premium be kept at $1.55 per hundredweight.

Mr. Seidel told the PMMB that he milks 50 registered Holstein cows and farms 120 acres.  He grows corn and alfalfa hay, but his total income is from dairy production and a small number of bull/heifer calf sales.  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 stated, “Because my milk is produced, processed, and sold in PA, I directly receive the PA Milk Marketing Board over-order premium.”  He said, “I am testifying today on behalf of the Pennsylvania State Grange.

He continued by saying, “The Grange is asking that the PA Milk Marketing Board keep the over-order premium at $1.55 per hundredweight.  We believe that the industry will bear this increase without jeopardizing the dairy market.”

Mr. Seidel reminded the Board that the Grange asked for an over-order premium of $1.95 per hundredweight last May.  He continued, “While we still felt that the $1.95 was justified, we acknowledged in September that there were concerns about marketing and milk supply.  As a result, we decided that a compromise premium amount should be $1.80 per hundredweight.  Now we are willing to compromise again.”  Continuing, he said, “We believe a higher over-order premium is justified, but we are advocating the continuation of the current over-order premium at $1.55 per hundredweight.  The current premium has not hindered the market and has given dairy farmers an added boost to their income.”

Charles then gave the Board some specific statistics.  He told them that, “The PA Agricultural Statistics Service Special Dairy Report for the third quarter of 2004 has also reported, however, that the production costs for the last 12 months has increased 1.8 percent over one year ago.  The same report shows that milk production in Pennsylvania per cow in the third quarter is down 1.7 percent from one year ago.  Milk production per cow in the third quarter is down and there are 10,000 fewer cows in Pennsylvania than one year ago.”  “I believe that the last figure is the most important,” he said.  “10,000 fewer cows in Pennsylvania is a significant number.  It means even though milk prices are higher, more and more dairy farmers are leaving the industry.”

“Since the last PA Milk Marketing Board hearing the state has had some severe weather related incidents of interest to the dairy industry,” he said.  “The hurricane season was not kind to many dairy farmers in the Susquehanna and Delaware River Basins.”  He continued, “There were many farmers who had extensive crop damage and as a result will have to buy feed.  Obviously, these farmers were not planning on buying feed, but are now forced to purchase feed from somewhere else.”  “This just adds another expense to many dairy producers,” he said.  

He closed his testimony by saying, “The bottom line is that milk prices are up, but so are production costs.  Hurricane victims have more expenses than a normal year.  Cows are still leaving the state in high numbers and the market has not suffered from the current over-order premium.”  “For these reasons,” he said, “the Grange believes that the Board should keep the over-order premium at $1.55 for at least the next six months.”

The Grange is a family fraternal organization dedicated to the betterment of rural America through community service, education, legislation and fellowship.  The Grange includes members of all ages from their Junior Grangers (ages 5-14), Youth Members (ages 14-35) and Regular Subordinate (Local) members (age 35 and up).  The Grange represents approximately 16,000 rural Pennsylvanians across the state.  It is the oldest agricultural organization of its kind in the United States. The National Grange (Patrons of Husbandry) began in 1867 and the PA State Grange was chartered in 1873.