Guest Editorial by Arden Tewksbury/Manager, Progressive
Agriculture Organization 10/25/2010
ALL OF THE DAIRY FARMERS' COSTS MUST BE COVERED
In a recent article, written by James Haggerty of the Scranton
Times, Mr. Haggerty did his usual good job of reporting figures given to him.
The article has been reprinted in several other papers.
However, there appears to be different illustrations given by
dairy farmers as compared to other sources in the article. The first
concern I have is where the article states that in 2009 the pay price to dairy
farmers was only 95 cents per cwt. below their operating
costs. This could be somewhere near right. However, the USDA
lists two different types of dairy farmers' costs. They are operating
costs and allocated overhead costs. During 2009, in Federal Milk
Marketing Order #1, the so-called Boston Market, where a substantial amount of
Pennsylvania milk is marketed, the average pay price for the year was $13.01
per cwt. For 2009, the USDA lists the following average cost
of production figures for Pennsylvania dairy farmers. Operating cost was
$16.23 per cwt. and allocated overhead cost was $10.26 per cwt. This
brings the total cost of operation up to $26.49 per cwt.
A cost of production figure of $26.49 and a pay price of $13.01
per cwt. tells me that many dairy farmers in Pennsylvania were shortchanged
$13.48 per cwt., not the 95 cents per cwt. as was reported..
Its extremely important that all the costs experienced by dairy
farmers must be looked at. However, in total fairness to these costs,
the USDA looks at all the costs on the farm plus all of the total sales.
They call it a total dairy enterprise. So, on paper they show an
additional income from the dairy farms such as cows sold etc. This
amounts on the average to be $1.50 per cwt. This figure must be
subtracted from the average Pennsylvania dairy farmers loss of $13.48 per cwt.
or a net loss of $11.98 per cwt. This is a staggering loss and fully
explains why the majority of dairy farmers are in their financial crisis..
All of these expenses must be used in determining what the real cost really is
to run a dairy farm.
Mr. Darling, Mr. Fetter, and Mr. Keating told exactly how it is
down on the farm. They seem to agree that $17 per cwt. milk is not going
to solve the financial problems of very many dairy farmers.. Feed costs,
fuel costs, and other items are on the rise.
To me, all this points for the need of a new diary bill, like
the Specter-Casey Bill. S-1645 would allow the pricing formula to cover
the dairy farmers' costs. Is there really anything wrong with pricing
milk on the dairy farmers' average cost of production?? Thousands of
dairy farmers and multi-thousands of consumers feel very strongly towards a
new pricing formula that covers the dairy farmers' cost of production.
Another thing, the USDA publishes figures that indicate that the U.S. is a
milk-deficit nation. If this is true, then why is
overproduction always the culprit of the collapse of dairy farmers pay-price?
Maybe it's time that proper officials examine many cheese vats across the
country to determine why the yields and reportedly some of the vats now
produce thirteen pounds of cheese out of 100 pounds of milk? Reportedly
the average yield is normally 10 pounds of cheese per 100 pounds of milk.
If this is true, then maybe this is some of our so-called overproduction.
What are the ingredients that are being dumped into the cheese vats?
Are they legal? Is this why many consumers are complaining about the quality
of many cheeses?
It is bad enough that we have imitation cheeses on the market,
but real cheese should be real cheese!