For Immediate Release: July 17, 2000

Contact David Ferch at (802) 229-1941




MONTPELIER, VT – The Northeast Dairy Compact Commission today released $4,456,685.46 to the dairy farmers who produced milk sold in New England during June.

            The farm price for milk – what the farmers receive as opposed to what consumers pay – remains below the cost of production although the price is beginning to creep up. This $4.5 million will be distributed to the dairy farmers on the basis of 7˘ per gallon produced in June. This payment represents 5.7 percent of farm income for the month.

            With the Compact, farmers who supply New England earn an average of $14.05 for every hundred pounds of milk produced. In the Pacific Northwest, dairy farmers are receiving about $9.72 for every hundred pounds of milk.

            The Compact has the authority to regulate only class 1 milk that milk used as a beverage. To treat all the region’s dairy farmers equitably, each farmer will receive the same Compact price applied to how much milk his or her cows produced. This price is determined by how much beverage milk was consumed. In June, New Englanders drank 27,167,652 gallons of milk and the regions farmers produced 64,627,109 gallons of raw milk.

            Compact payments all come from the marketplace; no tax dollars are involved in anyway in the operation of the Compact. By way of contrast, the federal government is expected to dole out more than $32 Billion this fiscal year in taxpayer-funded supports of agricultural commodities to farmers nationwide. These payments are spurred by the lowest soybean prices since 1972 and the worst corn prices since the mid-1980s. Corn and soybeans represent half of all acreage of US farm crops.

            The Compact operates as a regional pricing mechanism designed to maintain the viability of New England’s dairy farm industry and simultaneously stabilize the milk price for New England consumers. The Compact’s floor price protects farmers when milk prices collapse, as they have during the past six months.

            Since the inception of the Compact in July 1997, the farmers who supply the New England market have received roughly $115 million.


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