Commissioner Peterson Testifies Before USDA in Support of Changes to Western Milk Marketing Order

Utah Commissioner of Agriculture and Food, Cary G. Peterson today urged U.S. Secretary of Agriculture, Ann M. Veneman to make changes to the Western Milk Marketing Order that will restore fair and equitable pricing for Utah dairy farmers. Commissioner Peterson made his comments during hearings held by U.S. Department of Agriculture (USDA) in Salt Lake City, April 16, 17 and 18.

"Specifically these proposals will accomplish the following: help repair the inequalities and damages to Utah dairy producers from the Western Order; second, improve the Order Utilization and price for all dairy farmers pooled on the Order; and third, more accurately recognize the demand for milk in Utah," said Commissioner Peterson. Commissioner Peterson supports proposed changes to rules 6, 9 and 10 of Federal Order 135, thereby giving dairy farmers greater flexibility in marketing their milk.

The USDA is taking testimony regarding possible changes to the formula by which dairy farmers are paid for their product. Currently that formula pays Utah dairy farmers the least amount for their milk compared with other regions of the nation. The price farmers receive is based on the amount of milk that is consumed in their market area. In the past, Utah had been included in the highly populated Las Vegas market, but two years ago Utah was linked with the less populated Southern Idaho market, which resulted in lower payments to Utah's farmers.

"It is important to note that these severe reductions are the direct result of a political decision of USDA in 2000 - not from the reduced consumption in the fluid milk sales in Utah, nor increases in milk production by Utah dairy producers," Peterson added. Commissioner Peterson also testified that the low prices paid farmers has led to the substantial decline over the past three years of the number of dairies in Utah: 488 in 1999 to 406 in January of 2002.

In addition to Commissioner Peterson's comments, several other Utah dairymen offered testimony, including Mark Gibbons, the President of the Utah Dairymen's Association.

Gibbons said that according to the U.S. General Accounting Office, retail markup of milk in Utah nearly doubled from the years 1998 to 2000. He said the mark up of milk prices by processors increased 17 cents a gallon during that time, but that the price farmers received for their raw milk decreased by four cents.

"This inequality, coupled with the Federal Milk Market Order changes that occurred in 2000, has been devastating to dairy producers," Gibbons said.

Secretary Veneman will review the comments and evidence and could make changes in the coming months.

To learn more about this topic, visit http://www.ams.usda.gov/dairy/

To read Utah witness transcripts, visit: http://ag.utah.gov/pressrel/wmmo_testimony.html