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Md. dairy farmers plagued by production costs

December 02, 1999|By DAN KULIN /Staff Writer

Money will be tight for many Maryland dairy farmers and some will go out of business in the coming months when milk prices drop below the average cost of production, the head of Maryland's Dairy Industry Association said Thursday.

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The future would be brighter if Congress had allowed Maryland dairy farmers to join the Northeast Interstate Dairy Compact, said association President Myron Wilhide, who was in Hagerstown Thursday for the association's third annual meeting.

The Northeast compact is a federally authorized organization of the six New England states that are allowed to set milk prices above the federal minimum. Last month, Congress extended the compact for two years but locked out prospective new members, including Maryland, in a compromise between Northeastern and Midwestern lawmakers.

Wilhide, a fifth-generation farmer who milks 190 cows with his brother, Richard, on a farm near Detour, Md., said the dairy association will lobby to open up the compact to new members next year.

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Sen. Paul Sarbanes, D-Md., told the more than 100 farmers at Thursday's meeting that expanding the compact won't be easy.

Sarbanes said Midwestern lawmakers, especially from the big dairy-producing states of Wisconsin and Minnesota, would like to see the compact abolished not expanded.

"This is a very contentious regional issue," he said.

Currently, the prices Maryland milk producers receive are set by a formula based, in part, on the average wholesale prices of cheese and other dairy products. Farmers already know that their January milk checks will reflect a drop of at least $2.50 per 100 pounds of milk, Wilhide said.

He said that will push the milk price from more than $16 per 100 pounds to less than $14 per 100 pounds, which is the average cost of production. Milk prices had climbed to record levels above $17 per 100 pounds in the past year.

Lower prices could lead to the loss of more Maryland dairy farms, which have dwindled from 845 to 828 in the past year, according to the state Division of Milk Control.

"We're going to take a terrific hit," Wilhide said.

Wilhide said that if Maryland farmers had been allowed to participate in the Northeast compact the price of milk would still be going down, but probably by $1.50 instead of $2.50.

"The compact would keep prices steady. There's too much fluctuation now," he said.

Tracy and Janet Stiles, dairy farmers from the Boonsboro area, said the coming year will be a challenge, especially after last summer's drought. They said steady milk prices would have helped offset their extra feed costs due to damaged corn and pastures.

"People think we're looking for higher prices but we're just looking for stability," Janet Stiles said.

"If we had the dairy compact we wouldn't have to worry about price fluctuations," she said.

The Associated Press contributed to this story.

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