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Chester County Press

Legislation providing pricing accountability to dairy farmers approved by key committee

07/09/2014 08:50PM ● By ACL

Legislation to provide accountability and clarity in milk pricing for Pennsylvania’s dairy farmers was approved unanimously last week by the House Agriculture and Rural Affairs Committee.

The measure, House Bill 1996, authored by Rep. John Lawrence (R-Chester), aims to encourage transparency with regard to premiums owed to Pennsylvania milk producers. 

The Pennsylvania Milk Marketing Board, which regulates milk pricing in the commonwealth, has for many years assessed a fee known as the "over-order premium" on every gallon of milk sold in Pennsylvania. Monies generated from this premium at retail are to be returned to family farmers to help them cover production costs. Lawrence has heard from a number of dairymen who are concerned that some of this over-order premium money, perhaps a significant percentage of it, is not making it back to them as it should.

One of the problems is a lack of transparency.  Under current law, there is no standardized way for a farmer to know how much of his or her “milk check” results from monies collected by the over-order premium.  This is because each milk dealer and dairy cooperative sets its own policy as to how the over-order premium is distributed back to their member dairy farmers.

“Dairy pricing is an extremely complex issue, but accountability with regard to dairy premiums is one thing that I hope everyone can agree on,” Lawrence said. “The entire reason the premium was established by the state was to provide the dairy farmer with a bit of a cushion in the historically challenging environment of fickle market prices for dairy byproducts.” 

Lawrence’s proposal would require any payment, often referred to as a “milk check,” made to a farmer to clearly itemize the dollar amount and percentage of the total that consists of monies collected from the over-order premium.   

The bill now goes to the full House for consideration.