Contacts:
Diane Bothfeld, Vermont Agency of Agriculture, (802) 828-3835
Kelly Loftus, Vermont Agency of Agriculture, (802) 828-3829

Monday, January 14, 2008

Montpelier, Vt. - The Vermont Milk Commission, a quasi-judicial body appointed by Governor Douglas, has issued its final decision and report. The final report will be given at a meeting that is open to the public, Tuesday, January 15, 2008, at 10:30 a.m. in Room 10 of the Statehouse in Montpelier.

“The Vermont Milk Commission undertook an aggressive schedule of hearings over the last six months that created a body of evidence on the economic status of the dairy industry in Vermont,” commented Governor Douglas. “A strong dairy economy is important to the overall economy of Vermont. A more stable milk price system would benefit everyone involved in the dairy industry as well as consumers. I appreciate the Commission’s efforts.”

This information was utilized by the Commission to establish an “over-order” premium and a decision regarding the payment of hauling charges, pursuant to its authority, to be paid to farmers for fluid milk. The Commission investigated the movement of milk in the Northeast and the effect or consequences of an over-order premium and a minimum price on the industry to include processors.

The Vermont Milk Commission was directed by legislation, Act 50(S.78) of 2007, to establish by rule, pursuant to its authority under chapter 161 of Title 6, an over-order premium on Class I fluid cows’ milk, consistent with accepted pricing mechanisms at the farm gate and establish by rule a minimum producer price that is designed to achieve a price by which the cost of picking up the milk and hauling the milk from the farm to the purchaser will be paid by the purchaser. Considerations of other states’ actions specifically New York and Pennsylvania with regard to the over-order premium, and New York and one other Northeast Marketing Order Area for Federal Order 1 state with regard to the minimum producer price are legal contingencies in enacting any rule.

“I want to thank the very hard work and dedication exhibited by the Milk Commission members to find ways of making the dairy industry in Vermont more profitable and less volatile,” said Roger Allbee, secretary of Agriculture. “The Commission was diligent and thorough in their proceedings and the findings are important for Vermont’s dairy future.”

The hearing schedule began with an organizational meeting on June 19, 2007 and progressed through November. Sixty-five people associated with the dairy industry in Vermont as well as representatives from surrounding states, provided testimony and exhibits to the Vermont Milk Commission. Testimony from these individuals covered several topic areas which included but were not limited to: Milk Pricing, Milk Utilization/Movement/Supply, Hauling Cost for Milk, Federal Order System, Cost of Producing Milk, Processing Costs and Margins, Retail Costs and Margins, Dairy Statistics, Milk Promotion Programs, and the overall Health of the Industry.

The Commission members reviewed the hearing information as it pertains to Act 50 and the Commission’s general authority. The following findings, decisions, statements and recommendations from the Milk Commission as it relates to the legislative directive, and the commissions independent authority, are based upon factual evidence from the hearing process.

From this body of evidence the following decision, orders and recommendations are herby made:

III. a. Decision and Order Number 1
Over-Order Premium on Fluid Milk – from farms in Vermont, processed in Vermont and sold in Vermont

In deliberation of the testimony, the Milk Commission concludes that the implementation of an over-order premium on fluid milk, produced on farms in Vermont, processed by Vermont companies and sold to Vermont consumers will be implemented if the State of New York implements a similar regulation. Pennsylvania has a Milk Marketing Board that is implementing this type of regulation.

III. b. Decision and Order Number 2
Minimum Producer Price

In deliberation of the testimony, the Milk Commission concludes that the implementation of a minimum producer price on all milk sold in Vermont at the farm gate will be implemented when and if both the States of New York and Pennsylvania implements similar regulation.

III. c. Decision Number 3
A Different Approach

The Vermont Milk Commission will conduct further investigation into a different approach to an over-order premium. Further investigation of a multi-dimensional approach would involve a premium on all milk for fluid bottling transactions at the farm gate, contributions by dairy farmers and donations by businesses and individuals in Vermont to build a fund to stabilize milk prices and provide the safety net for Vermont farmers. This type of program will provide a pool of funds to be distributed to dairy farmers when the milk price drops below a preset level – making this program a counter cyclical method to stabilize milk prices.

III. d. Decision and Recommendation Number 4
Hauling Charges Paid by Purchaser of Milk

The Vermont Milk Commission recommends that the Vermont Legislature repeal that portion of Act 50 regarding charges for the hauling costs of milk, and the passing of those charges unto the purchasers of milk, and the restrictions on cooperatives and handlers from changing benefits and deductions in the payment interaction with dairy farmers and the requirement to adopt such a rule or order by January 15, 2009 notwithstanding the actions of any neighboring states. The Milk Commission makes this recommendation due to testimony of the adverse affects on Vermont farmers, cooperatives and processors in the state.

The Vermont Milk Commission takes very seriously the need for a financial safety net for Vermont farmers. Due to the complexity of the issues relative to development of a safety net, the Milk Commission will undertake further study and consideration of this issue. The first meeting of the Vermont Milk Commission to discuss this issue will occur in January 2008.