For Immediate Release, August 6, 1998

Contact: Tina Wisell, (802) 229-1941

Agreeing that more testimony was needed on one of the proposals, the Northeast Dairy Compact Commission on Wednesday decided to address two proposed changes to the Compact price regulation separately. The Commission also decided to escrow a portion of the next Compact payment to address a possible obligation to the Commodities Credit Corporation.

The Commission adopted as a final rule a proposal to establish a reserve fund for reimbursement to school food authorities. The proposed reserve fund is required to implement the previously issued regulation exempting milk sold in 8-ounce containers by the school food authorities from the Compact price regulation. Producers must give the final approval to the measure before the regulation can take effect. The Commission scheduled the producer referendum to be held August 14 through August 24.

Concerning a proposal to amend the Compact regulation to exclude milk from the pool which is either diverted or transferred out of the Compact area, the Commission determined that it needed additional information on the issue before it could make a final decision. After much discussion concerning a proposal to cap the amount of milk that could be diverted or transferred out of the region each month at 5 %, the Commission decided that an additional public hearing and extended comment period were needed in order to obtain necessary facts on the issue.

Topping the Commission's questions were 1) what the amounts of transfers and diversions were over the past few years, 2) if there was a rationale from coops for a 5 percent cap, and 3) when seasonal variations in milk marketing occur. The Commission, therefore, decided to reopen for testimony the issues regarding transferred and diverted milk, as well as the definition of producers under the Compact price regulation. A formal public hearing on the proposal was scheduled for 9:00 a.m. on Wednesday, September 2, 1998 at the Holiday Inn in Concord, NH and the public comment period was extended to September 16.

On a separate issue, the Commission decided to escrow 15¢ per hundredweight from the July pool paid in August to be set aside in a reserve fund for possible Compact Commission obligations to the CCC (Commodities Credit Corporation). Regulations Committee Chairman Bobby Starr stated that the 15¢ would result in an additional $750,000 to $800,000 being added to the $1.3 million already escrowed for the CCC reserve and should be an adequate amount to cover possible CCC contingencies. Starr said discussions are underway with the USDA concerning the amount of the Compact Commission's obligation that is due in September, and that depending on the USDA's final decision, the Commission could escrow an additional amount from the August pool paid in September, if necessary.