For Immediate Release Oct. 28, 1999

Contact David Ferch (802) 229-1941


MONTPELIER, VT -- To make sure that schools did not pay extra for 31,465,629 half-pints of milk sold to children in the '98-'99 school year, the Northeast Dairy Compact Commission today mailed out $183,500.39 to reimburse the schools for any costs attributable to the Compact.

Connecticut is receiving $69,636.27. Maine is receiving $21,808.65. Massachusetts is receiving $61,072.57. New Hampshire is receiving $2,316.03. Rhode Island is receiving $19,029.88. And Vermont is receiving is $9,636.99. The milk money is being sent to the child nutrition offices of the state departments of education, which will then distribute the money to the schools.

Although this reimbursement comes from the pool of money disbursed to farmers, the farmers showed strong support for the school milk program in recognition of the importance of milk to the dietary requirements of children throughout New England, according to testimony offered during the public hearing process.

The Northeast Dairy Compact works by ensuring handlers pay farmers a minimum price for milk. Sometimes this Compact Over-Order Price is higher than the Federally set price of milk and the handlers are obligated to make up the difference.

If the handlers pass on this price difference to their school customers, the Northeast Dairy Compact Commission will reimburse the schools. An overwhelming majority of schools in New England participated in the Compact Commission's school milk program. In a few cases schools chose not to submit the requisite documentation so a reimbursement could not be issued. In other cases the vendor did not pass on any cost increases to the schools so there was no need for a reimbursement.

This reimbursement applies to 31,465,629 8-ounce cartons of milk sold. New England schools sold more than this amount of milk in the year but because the federal price of milk was higher than the Compact floor price for several months, there was no basis for a reimbursement in those months.

When the Compact Commission voted in January 1998 to exempt school milk from the Compact Over-Order Price for the '98-'99 school year, the commissioners escrowed 3 percent of the producer pool each month to pay for the reimbursement. The producer pool is the money destined for disbursal to farmers. The 3 percent escrow proved to be a conservative estimate and the Commissioners reduced that escrow to 1 percent this fall for the '99-'00 school year.

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