For Immediate Release Contact: David Ferch

Oct. 20, 1999 (802) 229-1941

Northeast Dairy Compact Commission

Releases $1.1 million for Northeast Farmers

MONTPELIER, VT -- The Northeast Dairy Compact Commission released $1,106,648.23 today for payment to nearly 4,000 farmers in the six New England states and New York. This sum is more than would be expected given the current price of milk because surplus accounts were folded into the Compact pool.

The Compact pool is the amount of money disbursed to farmers to make up the difference between the fluctuating federal price for beverage milk and the Compact's set price. The Compact Commission has escrowed 6 percent of this pool each month to hold harmless school milk programs (3 percent) and the Women Infants and Children (WIC) nutrition program (3 percent). The WIC program and the school milk programs are reimbursed for any costs attributable to the Compact.

It turns out that the retail price impact attributable to the Compact is less than the escrowed amount and the Compact Commission decided to put this money back into the September pool disbursed to farmers in October.

Those sums are $685,000 from the school milk reserve account and $160,073 from the WIC reserve account. The reserve account in the school milk program is so much larger because the Commission was uncertain of the size of impact in the first year of this program and made a conservative estimate to escrow 3 percent. As a result of this new information, the Compact Commission voted at the October meeting to reduce the school milk reserve account to 1 percent of the monthly pool.

That is why September's adjusted over order producer price is 21 cents per hundred pounds of milk (cwt.) even though the difference between the federal price of beverage milk paid to farmers and the Compact's over order price was only 11 cents per cwt.

Since implementation of the Compact Over-order Price Regulation in July 1997, nearly $73 million has been returned to the regionís farmers, including roughly: $30.7 million to Vermont farms, less than $400,000 to Rhode Island farms, $22.3 million to New York farms, $3.6 million to New Hampshire farms, $4.3 million to Massachusetts farms, $6.4 million to Maine farms and, $5.5 million to farms in Connecticut.


For more information on how the Compact premium is determined or any of the other issues in this release, please call David Ferch at (802) 229-1941.

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