Pennsylvania Farm Bureau

510 S. 31st Street P.O. Box 8736 Camp Hill, PA 17001-8736

CONTACT: Mark ONeill, Director of Media and Strategic Communications, (717) 761-2740 mroneill@pfb.com www.pfb.com For Immediate Release: June 19, 2013

PMMB Significantly Reduces Premium Paid to PA Dairy Farmers

(Harrisburg) Pennsylvania Farm Bureau (PFB) expressed concern over a decision by the Pennsylvania Milk Marketing Board (PMMB) to reduce the overall Class I premium price paid for milk by a total of 83 cents (or 31%) for the six-month period beginning July 1, 2013. The board decided to decrease the over-order premium by 25 cents per hundredweight to $1.60 and to dramatically cut the fuel adjuster add on by 58 cents per hundredweight to 25 cents. We are deeply concerned that the Milk Marketing Board chose to reduce the overall premium by nearly one-third of the current premium. The decision translates into already tight margins on our dairy farms becoming even tighter with smaller milk checks to support family operations, said PFB President Carl T. Shaffer. The amount of the reduction is simply unjustified based on current market conditions for dairy farmers, whose production costs have reached all-time highs over the past four years. During testimony and through exhibits presented in a May hearing before PMMB, PFB experts painted a very detailed picture of how rising production costs and shrinking profit margins continue to burden farm families across the state. Dairy farmers need every penny they can get to help ease tight profit margins. Our cost of production is significantly higher than it was a few years ago. In fact, the majority of input costs have continued to go up, with some costs nearly double the cost level of 2009, said PFB Vice President Richard Ebert, who is chairman of PFBs State Dairy Committee and a Westmoreland County dairy farmer. Farm Bureau noted that the PMMBs decision sends a discouraging message to farm families, particularly the next generation of milk producers. We are trying to picture a future where my son Josh can quickly come on board as a partner on the farm, but well have to work even harder to sustain cash flow, particularly if current conditions remain the same. Significant reductions in the premium we receive for milk can make the difference between us taking out a loan to expand operations or not, added Ebert. The over-order premium and the fuel adjuster add-on mandated by PMMB are assessed on fluid (Class I) milk that is produced, processed and sold entirely within Pennsylvania, which is the fifth largest dairy producing state in the nation. Pennsylvania Farm Bureau is the states largest farm organization with a volunteer membership of more than 55,000 farm and rural families, representing farms of every size and commodity across Pennsylvania. ###