Two well known farms in Yankee’s territory would be adversely affected by proposed changes in federal milk marketing rules.
The proposed changes would affect the definition of milk processing plants that are exempt from participating in the “pool” in each federal milk marketing order. Currently a “producer-handler” is exempt from participating in the pool. A producer-handler is a farmer who processes and sells their own milk. Also exempt are small plants that sell 150,000 pounds or less a month (about 80 cows).
The proposed changes, which are jointly sought by the National Milk Producers Federation (NMPF) and the International Dairy Foods Association (IDFA), would:
- Eliminate the producer-handler exemption, and
- Increase the size limit for small plants from 150,000 pounds per month to 450,000 pounds per month (about 240 cows).
Farmers presently operating under the producer-handler exemption that have less than about 240 cows could continue to operate as nonpool plants under the expanded small plant exemption. Existing producer-handlers with more than about 240 cows would be required to participate in the pool.
There are two farms in Yankee’s territory that operate as producer-handlers and have more than 240 cows. Hatchland Farm in North Haverhill, NH and Monument Farms in Weybridge, VT each have 400-475 cows.
Producer-handlers who lose their exemption will see their costs increase due to required payments into the pool. It is likely that the increased costs would be sufficient to cause these businesses to cease operations in their current form.
Indeed, this is the intent. The IDFA petition states: “Whatever historical justification may have once existed for the producer-handler exemption, it clearly no longer applies in light of the substantial growth in some such producer-handlers, and the severe market disruptions that they now create…IDFA expects the impact of the proposal will be the elimination of the disorderly marketing conditions described…above.”
The NMPF/IDFA petition appears to be targeted at producer-handlers in the west, not the northeast. This article by Steve Taylor, former Commissioner of Agriculture in New Hampshire, explains the issue, as well as the likely effect on Hatchland Farm: “Dairy Producer-Handler Exemption in Peril.” The adverse effects on Hatchland Farm and Monument Farms appear to be collateral damage from a larger battle underway in the dairy industry.
The “severe market disruptions” mentioned in the IDFA petition apparently refer to an Arizona farmer and businessman named Hein Hettinga, as explained in Steve Taylor’s article. Mr. Hettinga was the subject of a 2006 article in the Washington Post about similar issues: Dairy Industry Crushed Innovator Who Bested Price-Control System.
Hatchland Farm and Monument Farms have built up their businesses over many years, and are much smaller scale than Mr. Hettinga. Yankee directors and employees toured Hatchland Farm last summer (see this blog post). Click here for a profile of Monument Farms (note that they have been the sole supplier of milk to Middlebury College for more than 55 years).
It is interesting to contrast the NMPF/IDFA petition with the growing movement for local foods (see this post). The NMPF/IDFA petition would reduce sources of local dairy foods in Yankee’s territory.
For additional information about this issue, including the NMPF and IDFA petitions, see the USDA web site for dairy programs. Follow the link at the bottom for “Request for National Hearings.” Click here for a 1-page summary of the status of this petition. The USDA will accept additional proposals until March 9, 2009, after which it will decide whether or not to hold a public hearing.
