For Immediate Release

Contact: Kenneth M. Becker

May 20, 1999 (802) 229-1941

Northeast Dairy Compact Commission

Pays $7.94 Million to New England Farmers

The Northeast Dairy Compact Commission will release $7.94 million today for payment to more than 4,000 farmers in the six New England states and New York. The average farmer in New England will receive approximately $2,000 from the funds.

The Compact sets a minimum price of $16.94 per hundredweight of Class I (drinking )milk, or $1.46 per gallon, and only collects and disburses payments when federal milk prices fall below that amount. Beginning in September 1998, federal milk prices began to rise above the $16.94 Compact minimum price. In January 1999, federal prices for drinking milk reached a high of $20.81 per hundredweight, a record price for milk. However, the price began to fall in February and the federal milk price fell $6.00 per hundredweight between March and April 1999, the largest drop ever in milk prices in a single month. The Compact payments released today will cushion the impact of this dramatic decrease in milk prices on the region's farmers. The Compact payments will limit the effect of that drop to $3.00 per hundredweight for farmers in New England and New York who supply milk to New England.

Executive Director Ken Becker stated, "The payments being made today to the region's farmers demonstrate that the Compact works as intended." The Compact is designed to stabilize milk prices for the region's farmers. Mr. Becker added, "Although farmers have experienced record high milk prices since September 1998, the federal milk price fell a record $6.00 per hundredweight between March and April. That represents a one-third reduction in farm income in just one month, and at the start of planting season. The Compact was created to address issues relating to the viability of the dairy industry in New England, including the volatility of farm milk prices. The importance of the Compact to the region's farmers is evident from the price protection the Compact is providing through the funds distributed today."

The Dairy Compact between the six New England states is scheduled to expire on October 1, 1999. Legislation to extend the Compact and to expand it was introduced in Congress on April 27, 1999. The States of New York, New Jersey, Maryland, and Delaware have already passed Compact legislation to join the six New England states in the Northeast Dairy Compact and Pennsylvania is currently considering legislation to join. The success of the Northeast Dairy Compact continues to generate support for Dairy Compacts throughout the country. Thirteen states have passed, and 2 more states are considering, legislation to create a Southern Dairy Compact and the State of Oregon is also considering Compact legislation. Since implementation of the Compact Over-order Price Regulation in July 1997, and including the payments made today, the Compact Commission has paid over $53 million to the region's farmers.


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