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New Jersey Authorizes Over-Order Premiums for Six-Month Trial Period

Oct 02, 2006

NJ Authorizes Over-Order Premiums for Six-Month Trial Period

On September 28, the New Jersey Department of Agriculture issued a decision that increased the minimum milk price that processors must pay dairy farmers. The decision mandates the payment of a fuel adjustment add-on, as well as the payment of a premium to New Jersey dairy producers for milk from cows not treated with rbST. The over-order premiums became effective today, October 2, and apply to all milk purchased from New Jersey producers.

Earlier this summer, IDFA and New Jersey processors, grocers and consumer groups testified at public hearings to raise concerns about the negative impact that any mandates would have on milk sales. These hearings were held July 24 and August 29.

The fuel adjustment add-on will be calculated using a formula similar to one the Pennsylvania Milk Marketing Board uses to establish fuel adjustments in its state. The add-on will increase the minimum price that processors must pay for farm milk used in Class I milk products by approximately $0.30 to $0.35 per hundredweight. Processors that purchase rbST-free milk from New Jersey producers will be required to pay an additional $0.76-per hundredweight premium.

The price adjustments will be effective for a six-month trial period. After that, the department will assess the effectiveness of both adjustments and will decide whether to extend them.

IDFA is gathering information on the potential for similar action in other states. If members are aware of any efforts to establish over-order payments for milk in other states, contact Patrick Gleason at pgleason@idfa.org or (202) 220-3528.

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To review IDFA's chart of 2006 state legislation related to dairy, click here. (.pdf) This new chart will be updated on a periodic basis to provide the status of monitored bills. For more information, contact the IDFA legislative group at 202-737-4332.

Posted October 2, 2006

 
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