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IDFA Opposes Vermont's Attempt to Mandate New Over-Order Premium

Sep 08, 2008

The Vermont Milk Commission is holding a hearing tomorrow to consider a new regulation that would require milk processors to pay a minimum price of $27.00 per hundredweight for all milk sold at retail in the state. If adopted, the regulation would allow the commission to collect from processors the difference between the minimum price and the federal government's Class I price for the Northeast milk marketing region. This revenue would go directly to producers in the region.

Under the new regulation, processors also would be required to pay an assessment to the Vermont Agency of Agriculture, Food and Markets to offset any administrative costs associated with implementation. IDFA opposes the regulation and has engaged Carl Herbein, a dairy cost accounting expert with 25 years of industry experience, to testify at the hearing on its behalf.

According to Herbein, dairy processors cannot absorb the price increase, which represents about 10 percent of the cost of raw materials, and remain in business. He and IDFA believe that the proposed regulation will have unintended consequences, such as pushing some companies to limit the products they offer, forcing others to seek financial relief from the state or causing them to consider leaving the state altogether.

"Although the proposal's goal is to stabilize pricing for dairy farmers, imposing a much higher, unchanging price for milk purchased from Vermont farmers is unrealistic and will do more harm than good," said Jerry Slominski, IDFA senior vice president of legislative affairs. "Dairy processors and retailers also are also struggling with rising costs of production and operation."

Herbein's testimony and a written statement from IDFA will be available following the hearing at www.idfa.org. For more information, contact Ruth Saunders, IDFA senior director of policy and legislative affairs, at rsaunders@idfa.org or 202-220-3553.

 

 
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