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Md. dairy farmers await Pa. vote on milk compact

March 09, 1999|By JULIE E. GREENE

Like many families, the Stiles have bills to pay and are trying to set aside money so they can send their two children to college one day.

Unlike many working families, the Stiles are unable to budget more than a month or so in advance because they don't have a determined annual salary.

The Stiles own one of approximately 1,015 dairy farms in the Tri-State area and depend upon the milk price set by a federal formula that can fluctuate wildly from month to month.

"It's difficult to plan savings, or budget, or make improvements, or build, or expand," said Janet Stiles, who with her husband, Tracy, has a 49-head dairy farm on Printz Road across from Devil's Backbone Park.

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About a year ago, Maryland lawmakers passed legislation allowing state dairy farmers to join the Northeast Dairy Compact so they could enjoy stable milk prices. But all conditions for that to come about haven't been met.

Maryland dairy farmers are waiting for Pennsylvania lawmakers to approve joining the Northeast Dairy Compact. For Maryland's membership in the compact to become active, a contiguous state must join.

New York and New Jersey legislators gave approval for those states to join the compact last year, leaving Pennsylvania or Delaware membership as the remaining hurdle.

Legislation has been proposed in Pennsylvania to allow dairy farmers there to join the compact. A similar bill is expected to be introduced for Delaware legislators to consider when their legislative session begins on March 17, officials said.

Once a contiguous state joins the compact, Congress must reauthorize the Northeast Dairy Compact before it expires on Sept. 30, said Ken Becker, the compact's executive director.

If all that happens, a commission in each state will determine the price per 100 pounds of milk that farmers will receive from processors such as Giant Food or Kraft Foods, said Paul Weller, executive director of the Maryland Dairy Industry Association.

Prices set by the commission will be good for six months and will guarantee a higher minimum price, giving farmers the stability they have long sought, Weller said.

Janet Stiles said dairy farmers need the higher minimum price because they are running out of ways to make their operations more efficient.

To increase income, dairy farmers add more cows or try to get more milk out of the cows they have, Stiles said. She said she worries about how her family will pay their the bills when the farm runs out of such steps to take.

Prices have been favorable for dairy farmers in recent months, but the price of milk is expected to fall drastically within 30 days, industry officials said.

The price of milk in the mid-Atlantic region just took its largest drop since the mid-1960s, plummeting from $19.30 per 100 pounds in March to $13.30 per 100 pounds in April, said David Walker with the Federal Milk Market Administration's mid-Atlantic office. One hundred pounds is about 11 gallons of milk.

That price affects milk that consumers can buy in Washington and Frederick counties in Maryland, and Franklin and Fulton counties in Pennsylvania.

The formula is influenced by the competitive price for milk in the upper Midwest and the price of cheddar cheese, Walker said.

Compacts set a price above the minimum set by the federal formula, Walker said.

Opponents have argued that a compact would result in higher prices for consumers.

The price consumers pay for milk might go up a few pennies, but they will have input in setting the price, Weller said.

The processors and the consumers each will have a representative on the commission who can veto a proposed price, preventing milk prices from getting too high, Weller said.

The West Virginia Legislature voted last year to join a new compact, the Southern Dairy Compact, said Steve Miller, executive director of Eastern Operations for the West Virginia Department of Agriculture.

Miller said a bill could be introduced in Congress as early as this week to ratify the new Southern compact and reauthorize the Northeast compact.

Once Congress approves the new Southern compact, it probably will take six months to a year to get it up and running, Miller said.

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