HARRISBURG – The Senate Agriculture and Rural Affairs Committee, led by Chairman Sen. Elder Vogel, Jr. (R-47) and Minority Chairwoman Sen. Judy Schwank (D-11), held a public hearing today to open an in-depth discussion about the state’s Over Order Premium on Class I milk and what the future of that premium could look like.
Representatives from the Pennsylvania Department of Agriculture, Pennsylvania Milk Marketing Board (PMMB), Pennsylvania State Grange (PSG), Pennsylvania Farm Bureau (PFB), Pennsylvania Milk Dealers Association, Professional Dairy Managers of Pennsylvania, Pennsylvania Association of Dairy Cooperatives (PADC), and the Pennsylvania Dairy Association were present to lend their expertise and point of view to the conversation.
“The issues surrounding the over order premium are not new to the dairy industry and today’s hearing was meant to be a collaborative effort between all involved parties to see if and how we can potentially address the premium in the future,” said Vogel. “This matter has proven to be one of complexity and is not one to be taken lightly as it is comprised of many moving parts.”
“Pennsylvania’s dairy industry has changed dramatically since the launch of the Over Order Premium,” Schwank said. “Today’s hearing was an essential first step in working towards a transparent and equitable process for updating the Over Order Premium. It’s encouraging that so many stakeholders offered informed and thoughtful testimony. I believe we have many opportunities to craft a program that better reflects the needs of Pennsylvania’s dairy farmers and processors.”
Over the past several decades, there has been much debate as to the effectiveness, fairness, and necessity of the current over order premium being that the premium was initially adopted by the PMMB in 1988 as part of a drought relief order.
During the hearing, testifiers seemed to be divided on whether the premium should be fully dissolved going forward.
Some PMMB members felt the premium is getting more difficult to defend and has proven to showcase an inequality in distribution to dairy farmers, while other PMMB members pointed out the premium is beneficial to dairy farmers and may need some modernizing to increase the effectiveness of the premium.
Other testifiers such as the PSG recommended while it would be good to entertain improvements to the premium, other avenues should be explored as well to ensure there are equitable measures established for all of the state’s valued dairy producers.
The PFB supported the notion the General Assembly has the greatest ability to enact material changes to the premium with the PADC suggesting the Legislature amending the Milk Marketing Law to allow the PMMB to change how the premium for state dairy farmers is collected and distributed.
Additionally, there was collectively expressed support of a legislative package that was sponsored by Vogel and Schwank (Senate Bills 840 and 841) last session, which would give the PMMB the ability to collect information it currently does not have the authority to collect and is necessary for effective administration of the Milk Marketing Law; and add milk distributors to the Milk Marketing Fee Act.
Vogel added, “I want to thank everyone for taking the time to have this important discussion. The valuable information and perspectives shared will be most helpful as we try to navigate through this complex issue moving forward.”
Pennsylvania is divided into six milk marketing areas overseen by the PMMB and the federal government who monitor and enforce minimum payments to milk producers. The state-mandated over order premium is paid to Pennsylvania farmers for milk that is produced, processed, and used as class I milk (fluid drinking milk) in Pennsylvania. The Federal Milk Marketing Orders only cover specific geographic areas in Pennsylvania and can cross state lines; these orders establish minimum prices for all classes of producer milk.