Dairies enjoying record prices But milk buyers are being spared at the store


November 11, 1998|By Ted Shelsby | Ted Shelsby,SUN STAFF

HAGERSTOWN -- While grain and livestock farmers are struggling through one of their worst seasons ever, Maryland dairy farmers are benefiting from record high milk prices.

Those prices -- which have been 25 percent to 30 percent above last year's level -- are probably not sustainable, Myron Wilhide, president of the Maryland Dairy Industry Association, told about 150 farmers attending the association's annual meeting yesterday.

"Things are definitely a lot better than last year," when milk prices were low and the Central Maryland dairy region suffered through the most severe drought in 35 years, Wilhide said.

But the high prices for the farmer have not adversely affected consumers, Kevin McNew, an economist with the Agricultural and Resource Economics Department of the University of Maryland, said last week. "Manufacturers and retailers were hesitant to pass the milk price increases on to consumers for fear of slicing into the demand for dairy products," he said.

Wilhide, who operates a dairy farm in Carroll County, warned that the boom times won't last. "We would hope these prices hold up," he said, "but they are expected to begin falling again in the next month or two."

Early next year, Congress is expected to consider legislation that would allow Maryland and other states to become members of the Northeast Interstate Dairy Compact.

The compact is designed to halt the sharp decline in the dairy industry, which has resulted in the loss of 25 percent of Maryland's dairy farms since 1991.

The decline has been blamed on the price the state's farmers receive, which has remained consistently low and not kept pace with rising retail prices for milk.

The average farm price of milk was $16.93 a hundredweight in September, the latest period for which figures are available. This is up from $14.55 in January. Over the same period, the average retail price of a gallon of 2 percent milk at Baltimore area stores has declined to $2.39 from $2.56, according to a survey by the Pennsylvania Milk Marketing Board, which follows milk prices in the mid-Atlantic region.

Despite the jump in milk prices this year, 28 state dairy farms have gone out of business over the past 12 months, according to William Zepp of the state health department's Division of Milk Control.

He said the farms succumbed to the financial pinch of the past 10 years. And, Zepp said, "If we see this many people dropping out when prices are good, what's going to happen early next year when prices drop again?"

Pub Date: 11/11/98

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