Md. dairy farmers gain higher milk price State cooperatives to raise rate after Pa. board votes to do so

October 22, 1997|By Ted Shelsby | Ted Shelsby,SUN STAFF

Maryland dairy farmers are in line for a pay raise, thanks to action taken yesterday by the Pennsylvania Milk Marketing Board.

The board, which sets the minimum prices of milk at the farm, processor and retail levels in Pennsylvania, voted unanimously to increase the Class 1 (drinking milk) price by 40 cents a hundredweight, or 3.4 cents a gallon.

Milk cooperatives serving Maryland had already agreed to pay state farmers the higher price if it was approved in Pennsylvania, according to Myron L. Wilhide, interim president of the Maryland Dairy Industry Association.

Because Maryland is bordered by two states (Pennsylvania and Virginia) that set minimum prices, Wilhide said, state farmers could not demand a higher price for their milk unless one of the other states took the action first.

"If we got a price increase and they didn't, it would be easier for processors in Pennsylvania to come down and take away more of our market," Wilhide said.

The Maryland legislature killed a bill earlier this year that would have put the milk industry in Maryland on a equal footing with those bordering states.

Tracey L. Jackson, a spokeswoman for the Pennsylvania Milk Marketing Board, said low prices set by the federal government and the drought that has increased farming costs in the southern Pennsylvania counties were factors in boosting the price of milk.

"But our milk prices are still lower than in Maryland," she said, noting that the average price for a gallon of 2 percent milk was $2.32 in Pennsylvania last month compared with $2.41 in Maryland. She said 99 percent of the stores in Pennsylvania charge the state-set minimum price for milk.

Wilhide said the increase would amount to about 14 cents a hundredweight (1.2 cents a gallon) to a farmer milking a herd of 150 cows. Farmers are not paid the higher Class 1 price. They receive what is called a blend price, which factors in the lower price for milk used in making cheese or made into powder.

For a herd of 150, he said, that would add about $336 to a farmer's monthly milk check.

Wilhide said the farm price should not lead to higher prices at supermarkets or convenience stores. "Somewhere between the farmers and the consumer there should be some way to absorb this increase," he said.

Studies by the University of Maryland, College Park, show that the price Maryland farmers receive for their milk is basically the same as it was 15 years ago.

Over the same period, retail prices have risen more than 40 percent. Barry F. Scher, vice president of public affairs for Giant Food Inc., a milk processor and the Baltimore area's largest grocery retailer, said the higher prices to farmers would boost retail prices an undetermined amount.

Pub Date: 10/22/97

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