Dairy farmers discuss proposed changes to milk pricing
Milford Township dairy farmer Harold Shaulis Jr., a farmer for 37 years, is one of many local farmers who would be impacted by changes to milk pricing. Here he is pictured tending to one of his calves. (Staff photo by Katie Walker)
Lawmakers are considering a measure that would penalize overproduction. Local farmers interviewed are leery of such a law.
Under the Federal Milk Marketing Improvement Act of 2011, or Senate Bill 1640, the U.S. secretary of agriculture would determine the price of milk used for manufacturing purposes. The price would be based on the national average cost of production each month. The bill includes a milk supply management program to ensure milk production is aligned with the needs of the market.
Though the proposed legislation seems promising to some, many Somerset County farmers disagree with the idea of supply management. The program doesn't tell farmers how much milk they can produce, but in the event there is an overabundance, those who produce too much milk may have to pay a penalty on the oversupply.
"It would be the worst thing that could ever happen to the dairy industry," Milford Township farmer Harold Shaulis said. "First of all, a lot of our dairy goes to exports. If we go into a situation where we're controlling what we're producing, it will send a message to the world that we're not going to be a reliable source of milk in the future."
Shaulis, who has been a farmer for 37 years, thinks supply management would be detrimental to local dairy farmers.
"Most of the farmers you talk to that support it have never been off the farm. I would encourage all dairy farmers to really look at this bill and think about what's best for your farms," he said. "We need to keep the global market."
Glenn Stoltzfus, who operates a dairy farm with his family near Berlin, isn't sure if regulating milk production is a good idea.
"I'm one that believes that the less government is involved, the better we are," he said. "Usually when government starts tinkering with it, there are a lot of consequences."
Though Stoltzfus would like to see pricing changes, he doubts the success of a supply management system.
"A supply management system I don't think has any shot at working unless they make it mandatory," he said. "I think too many people are going to opt out of it. And as soon as it's mandatory, then the government is involved."
Many agricultural experts, however, believe the bill would help farmers obtain greater profits for their milk while streamlining the pricing process.
"Like everybody else, dairy farmers are living in an ever-changing world, yet we continue to be paid as we were 30 years ago," dairy farmer Paul Rozwadowski said. Rozwadowski, who is from Stanley, Wis., advocated pricing changes during a conference call last week.
Farm leaders from Pennsylvania, New York, Wisconsin and California were part of the discussion.
The number of dairy farms in Somerset County has decreased substantially during the past decade.
"There are about 245 dairy farms (in Somerset County)," Miguel Saviroff of the Penn State Cooperative Extension said. Saviroff is the agricultural financial manager of the cooperative extension in Somerset County.
"That number has been dropping. About 12 years ago, there were 330," he said. "There are about 17,500 dairy cows within the county."
Farmers seem to agree that changes need to be made to help stabilize milk prices.
Shaulis supports a bill introduced by U.S. Rep. Collin Peterson, D-Minn., earlier this year that would impose limits on milk production when the difference between milk prices and milk production costs reached a certain level. Additional sales would go to the government.
The bill also includes an overall simplification of the current milk pricing system. Though the system classifies milk into four categories, his proposal would include just two — milk and all other milk products.
"With the Peterson bill there are no mandatory quotas placed on anybody," he said. "The government would provide farmers with an insurance policy. Beyond that, you're on your own."
Shaulis advises farmers to "do their homework" before supporting proposed legislation.
"The free market is still the best way to go," he said. "It doesn't guarantee you a price — it guarantees you a profit."