Meeting in Maine

            The Maine meeting was held in Portland, and focused largely on the Compact’s immediate benefit for farmers and the overall rural economy.  Reflecting Maine’s increasing diversity as a state, the Commission also heard from a number of speakers about the impact of the price regulation on consumers and about the indirect benefits of the price regulation relating to open spaces.  The Commission also heard from two representatives of processing facilities about the impact of the price regulation on their businesses.

The Maine meeting was also highlighted by a combined, strong representation of the state’s congressional delegation and state legislature.  United States Senator Susan Collins (Attachment 41), Congressman Tom Allen (Attachment 40) and Congressman John Baldacci (Attachment 39).were joined by practically the entire leadership of the state legislature, including State Senator Michael H. Michaud, President of the Senate (Attachment 37-5h), State Senator Richard A. Bennett, President Pro Tempore (Attachment 51), and State Representative Michael V. Saxl, Speaker of the House (Attachment 45).

Senator Collins described the Compact as a regional rather than partisan issue, and the comparatively minimal rate of increase in milk production in the Compact states over the previous four years the Compact price regulation has been in effect:

Since the Compact’s inception, milk production has increased by only 2.2 percent in the Northeast, while nationally production went up by 7.4 percent. Last year the amount of milk produced in our region actually fell slightly. Moreover, to insure that Northeast farmers do not increase their supply of milk to the detriment of farmers in other regions, the Compact Commission has instituted safeguards, as required by the authorizing legislation, that prevent the overproduction of milk. (Attachment 41 – 5r)

Congressman Baldacci, lauded the idea behind the Compact of people working together to support agriculture to the benefit of the entire state:

I think the longer and harder we work together to promote a stronger, viable agriculture, I think it will be leading to an overall healthy state and region for all of us to live in and be able to raise our families in. (Attachment 39 – 5n)

Congressman Allen spoke of the impact of the dairy farms and the Compact in Maine, beyond agribusiness:

The impact on what Maine feels like – on our history, on our culture, on our open space could be dramatic. It seems to me that we have to do everything we can to preserve dairy farming in Maine and in the northeast. That is a struggle. (Attachment 40 – 5p)

            Representative Saxl gave a statement most representative of his colleagues’ position, stating,

Absolutely, it’s about promoting small businesses that are family farms in Maine. Absolutely it’s about protecting open spaces. Absolutely it’s about making sure that we stabilize costs across the market over different months of the year. But at the end of the day, it’s about the work that people do, literally, in the field: providing an incredible product for our state and for our people so that we can literally have a healthy future… (Attachment 45-5aa)

            The Commission heard from all angles with regard to the impact of the price regulation on farms and the dairy industry.  Long time dairyman Harold Larrabee spoke of the impact on the farm,

In the year 2000, Compact payments received by our farm paid for our electricity bill, farm and auto insurance, property taxes, and approximately half of our fuel bill, which totaled $60,000. This would have been lost income because of low milk prices, if not for the Compact. (Attachment 49-5jj)

 
           Jon Olson, executive secretary of the Maine Farm Bureau spoke to dairy farming’s critical position in Maine agribusiness,

Maine’s dairy farmers play a vital role maintaining the critical infrastructure for all of Maine’s agriculture. Without the state’s dairy farmers there will be fewer large animal veterinarians practicing in Maine. There would be fewer equipment dealers selling parts and services for all farmers. There would be less availability of bulk deliveries of feed and custom feed mixes for other livestock farmers. Maine dairy farmers provide a critical mass that keeps all of Maine agriculture sustainable. (Attachment 50)

          William Bell, executive director of the New England Grain and Feed Council also spoke to the crucial position of dairy farmers in the Maine market, and the crucial nature of the Compact in helping those farmers to pay their bills to secondary businesses.

Dairy farmers are our most important customers. The Compact milk prices are what have kept many of these customers in business during tough times when even our best customers would otherwise have struggled mightily to pay the feed bill. (Attachment 48-5ii)

Tom Brigham, chief financial officer of Oakhurst Dairy, was one of two processors to speak at the Maine meeting, the other being Mike Suever of H.P. Hood. Mr. Brigham spoke of his company’s assessment of the Compact,

During the four years that the Compact has been in existence, I estimate that the over-order premium, established by the Compact, has added an average of eleven cents to the wholesale selling price of a gallon of milk. Such an increase would seem to be in line with normal inflation and other consumer product price increases that have occurred during that timeframe. At the same time, we have not noted any trends in sales that would be indicative of a significant decline in the consumption of fluid milk products.

Given that the Dairy Compact requires that the over-order premium be assessed on all dairy processors who sell fluid milk products within any of the six New England states, we find that it has effectively kept up on a “level playing field” with regard to our competitors (Attachment 46).