Md. panel seeks milk commission Group would set minimum prices

July 14, 1993|By Ted Shelsby | Ted Shelsby,Staff Writer

With hopes of providing an economic boost to Maryland's struggling dairy industry, a state task force has recommended the establishment of a commission that would set minimum milk prices -- a move that would mean consumers would pay more for milk, ice cream and cheese at the supermarket.

The commission, which would be appointed by the governor, would be patterned after marketing programs already in place in neighboring Pennsylvania and Virginia that set minimum prices at the farm, processing and retail levels. Half of its six members would be consumer representatives with no ties to the industry.

The proposed milk commission is just one of eight recommendations the task force made in a 21-page report submitted to state officials late last month, but it is by far the most controversial.

At least one member of the task force said she did not believe that formation of a commission would guarantee farmers a higher price for their milk.

Another agriculture expert warned that it could end up hurting

the dairy industry here more than it helps. And Maryland's top agriculture official, while expressing support for the industry, said he needed more information before deciding whether to back the proposal.

The task force's recommendations grew out of its assessment that Maryland's billion-dollar-a-year dairy industry was being squeezed out of existence. The report, "The Maryland Dairy Industry: At a Major Crossroads," said nearly a fourth of the state's dairy farms have disappeared since 1986. It expressed concern that if steps are not taken to stem the current exit rate, 60 percent of the approximately 1,200 remaining farms will be gone by 2013.

In addition to farm sales of about $182 million, the report said there are 13 processing plants in Maryland with 2,264 employees, supplying approximately $766 million worth of dairy products each year.

The task force said the price-setting policies in the neighboring states put Maryland's dairy industry at an economic disadvantage.

Boyd Cook, a task force member and manager of the Dairymen Inc., a milk cooperative in Sykesville, said the minimum prices build in enough of a margin to allow processors in those states to get rid of excess milk by undercutting Maryland producers.

"They can bring milk into Maryland and sell it for six or seven cents a gallon cheaper than the local guy can," he said.

Tracey Jackson, a spokeswoman for the Pennsylvania Milk Marketing Board, which sets prices there, said the organization's surveys show that while Pennsylvania prices are generally lower than in more than a dozen other states with price regulation programs, they are higher than shoppers pay in Maryland.

Agriculture Secretary Robert L. Walker said yesterday that while he was sympathetic to the position of Maryland's dairy farmers, he needed more facts before making any recommendations to the governor and state legislators.

"Consumers may be willing to pay more for milk at the store to help maintain Maryland's dairy industry," he said. "But we have to be able to show them in black and white that we have a problem here."

Martha Clark, a dairy farmer in Howard County and the only woman on the 26-member task force, said she remained doubtful that a commission would benefit farmers.

"No one has convinced me we would get a better price," she said.

Bruce Gardner is another skeptic. An assistant secretary of agriculture in the Bush administration and now a professor of agriculture economics at the University of Maryland, Mr. Gardner said he feared a commission could backfire.

In a letter to Mr. Walker, Mr. Gardner said, "It's true that the

Maryland milk price received by farmers has been running 10-30 cents per hundredweight below Pennsylvania and Virginia. But we are well above New York and U.S. average prices.

"The risk is that if the commission requires handlers to pay a higher price for Maryland milk, there will be a substitution of out-of-state milk for Maryland milk and Maryland dairying will decline even faster."

The proposed six-member commission would be appointed by the governor.

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