Ag department taking testimony in milk pricing order

This article submitted by Linda Stelling on 5/12/98.

Minnesota Attorney General Hubert Humphrey urged U.S. Secretary of Agriculture Dan Glickman to drastically reform the federal milk marketing order system. ďThat system, a relic of the 1930s, discriminates against Minnesota dairy farmers by paying higher milk prices to farmers in other areas of the country, based in part on their distance from Eau Claire, Wis.,Ē Humphrey stressed.

In the 1996 Federal Farm Act, Congress directed the U.S. Department of Agriculture to institute reforms of the milk marketing orders. In response to the Congressional mandate, Glickman has requested public input on two options. The first (option 1A) maintains the current discriminatory system, making minimal changes; the second (option 1B) is more market oriented and removes some of the unfairness faced by Minnesota producers.

Melvin Kunstleben, Paynesville, said the Upper Midwest Coalition is lobbying for Option 1B, the second option, as it is better for farmers in the upper midwest. ďIím disappointed that some people donít seem to know which option to support,Ē Kunstleben said.

Testimony is still being taken on the two options. Kunstleben said he has made several telephone calls to congressmen as his schedule didnít allow him to testify in person.

ďOur farmers have struggled for decades under a federal milk pricing system that sets a minimum price for their milk that is lower than the prices for farmers in Florida or Texas,Ē Gene Hugoson, Minnesota Department of Agriculture Commissioner, said.

The latest deadline for submitting comments was April 30, but Kunstleben said they seem to keep taking testimony.

Commissioner Hugoson testified, placing a price floor on Class I and Class II milk would have practically no benefit for Minnesota milk producers because less than 20 percent of the milk produced in Minnesota is used for Class I and Class II purposes.

ďOur message to Washington is that while this price floor could appear positive for Minnesota dairy farmers at first glance, the overwhelming majority of the benefits would go to markets outside the Upper Midwest,Ē Hugoson said. ďIn the end, a price floor would hurt our dairy farmers because it would add to the existing pricing inequalities weíre fighting so hard to correct.Ē

Humphrey has noted that dairy farmers in Minnesota are going out of business at the rate of about three each day. But dairy production is increasing in areas not naturally suited to dairy, such as the arid southwest.

The existing system was found illegal three times by federal judges in suits filed by Minnesota producers and supported by the state of Minnesota.

Glickman faces strong political challenges to his quest for reform from the congressional delegations of those states that benefit from the current system.

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