COMPACT COMMISSION RELEASES $2,182,387.03 TO PRODUCERS FOR MARCH 2001; OVER-ORDER PRODUCER PRICE $0.39 PER CWT; APRIL 2001 OVER-ORDER OBLIGATION ANNOUNCED AT $0.25.
MONTPELIER, VT – The Northeast Dairy Compact Commission has released $2,182,387.03 to the approximately 4000 dairy farmers in the New England milk shed for March 2001 milk shipments. Farmers received $0.39 per hundred pounds of milk shipped into the New England market. (A hundredweight of milk is the equivalent of 11.6 gallons.)
The Compact price regulation applies to the price paid by milk processors for all Class I or beverage milk marketed in the six-state New England marketplace. Under the Compact price regulation, the amount charged to processors for beverage milk is calculated as the difference between $16.94 per hundred pounds of milk and the monthly price established for beverage milk under the federal milk market order pricing program. In March 2001, the Compact price regulation’s “over-order obligation” or charge was $1.04 per hundred pounds.
The over-order obligation charged to processors is applied only to milk processed for Class I or beverage consumption and not upon milk used for manufactured products such as ice cream and cheese. Payments to farmers from the proceeds of the obligation, however, are made on all of milk they produce for the New England market, for all products. In March, 47 percent of the total pooled milk was used as beverage milk. In addition, from the total obligation collected from milk processors, some funds are removed for the Compact Commission’s school milk, (one percent) WIC (three percent) and supply management (7.5 cents) programs. Some accounting adjustments are also made. With these calculations, the over-order obligation of $1.04 yielded a pay price of $0.39 for each hundred weight of milk produced by farmers.
In February the over-order obligation was $1.75 per hundredweight, and the over-order producer price was $0.68. In January, the federally established price for beverage milk rose above $16.94, resulting in a zero over-order charge for January, and a zero pool payment for farmers.
The announced over-order obligation for April 2001 is $0.25 per hundredweight.