Last week, the Pennsylvania Milk Marketing Board changed the equation of how over-order premiums are paid to the state's dairy farmers. The result: Pennsylvania producers stand to gain another $6.7 million in annual revenue starting Oct. 1, 2010.
Under the new ruling, milk processors who purchase milk from both Pennsylvania and out-of-state dairy farmers will be required to pay the entire over-order premium on the Pennsylvania milk.
Under current rules, the amount paid depended on the ratio of the Pennsylvania milk to the total milk purchased. For example, if half of the milk a processor purchased is from Pennsylvania, the over-order premium obligation to those Pennsylvania producers is reduced by half.
The change to 100% payment is warranted because the mandatory minimum price for every gallon of milk sold in the state includes an amount to cover those payments, which is approximately 25¢/gal, says the Board.
Gov. Edward Rendell (Dem.) hailed the news. "Together, we used every ounce of authority given us by the state's Milk Marketing Law to provide some relief to our dairy farmers during this unprecedented crisis,” he says.