Testifying to the Pennsylvania Milk Marketing Board, Arden Tewksbury, manager of PRO-AG, urged the Board to continue the special-order premium of $1.00 per cwt.(hundred pounds of milk).
The PRO-AG manager said the premium is needed because neither the USDA nor the US Congress has developed a new pricing formula for milk for our dairy farmers that would consider the farmer’s cost of producing milk.
The PRO-AG manager said the best way to have a premium is to have several states work together to develop the premium that would benefit many dairy farmers.
Tewksbury used the following example: years ago the New England authorities developed a premium for the dairy farmers’ milk in their area. Durling Farms, located in White House, New Jersey, assembled milk in Pennsylvania, took the milk to White House N.J. where the milk was bottled. Durling had outlets for their milk in New England. The dairy industry in New England had developed a special premium on milk that was bottled. Durling collected the premium on their milk that they sold in New England. When they paid their dairy farmers in Pennsylvania, they returned all the premium money collected in New England to their dairy farmers in Pennsylvania.
Eventually this premium came to a halt in New England. Realizing that dairy farmers in Pennsylvania no longer had the New England premium, the PRO-AG manager met with Cory Durling in Tunkhannock and the Durling premium was developed.
At one time this premium reached $1.50 per cwt. Most of the time it was $1.00 per cwt. When Readington Farms bought our Durling Farms, the $1.00 per cwt premium was maintained plus the new Regional Cooperative Marketing Association (RCMA) was created. Both Durling and Readington paid their premium plus the RCMA premium. Their premium lasted many years until the recent closure of the Readington plant.
The PRO-AG official said that the overall premiums brought in millions of dollars for the dairy farmers.
When Readington closed their plant this past year, their dairy farmers had to find a new home for their milk. Now, unfortunately, these dairy farmers are paying a “marketing cost” instead of receiving a $1.00 per cwt. premium.
At the Milk Marketing Board hearing, Tewksbury urged the board not to eliminate the special premium unless they have a better way to return an adequate price to the dairy farmers.
The PRO-AG manager claims that the dust will not settle with all dairy farmers until a new milk pricing formula is developed for all dairy farmers across the country.
Tewksbury concluded by saying that “if the dairy co-ops could find a way to reduce their marketing costs to their dairy farmers, the end result would be the equivalent of a premium to the dairy farmers.”
