Lawmakers may try to eliminate milk hauling fees

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(Host) Lawmakers may try to eliminate the fees that farmers have to pay to have their milk hauled from the farm.

Lawmakers say that with milk prices low, farmers need every break they can get in order to survive.

VPR’s John Dillon reports:

(Dillon) Addison Senator Harold Giard brought an armload of groceries to a Statehouse committee room.

The show and tell was designed to make a point. All the products he carried – cookies, blocks of cheddar, infant formula, and one impressively large bag of orange cheese snacks – are made with milk. And, Giard says, the farmers get a tiny share of the retail price.

(Giard) “This candy bar right there sells for $6.09 a pound, that’s $12,180 a ton. Main ingredient: milk. Doritos, can’t make ’em without it. Cheddar cheese, Romano cheese, whey, $4.29 a pound, $8,590 a ton. During the year 2006, the average price to the dairy farmer was $12.80, brings that to a little over $250 per ton to the farmer.”

(Dillon) Prices paid to the farmer last year fell to levels not seen since the early 1980s. But Giard says farmers still had to pay co-ops and other milk handlers a fee – usually around 50 to 60 cents per hundred pounds to have their milk hauled from the farm.

(Giard) “And the question is, why should the company, whoever it is, McCormick that makes this – Frito-Lay- why should we subsidize them, the farmer that works 100 hours a week, subsidize them?”

(Dillon) Giard wants the hauling costs passed on to the buyers of milk, the co-ops or other end-users of the product. That’s what happens in other businesses, he says.

(Giard) “I’m saying it’s time for the industry to mature, grow up and push the cost upstream like everybody else does.”

(Dillon) But an economist for Agri-Mark, the region’s largest dairy cooperative, said the co-op would probably fight the legislation. Robert Wellington testified by phone, and he warned that if the co-op was forced to absorb hauling charges, it would have to reduce what it pays its farmers.

(Wellington) “If you’re not going to charge them for this, the money has to come from somewhere. And I’m just looking at this, and saying if we couldn’t get it from the marketplace, it would come from some other end of the milk check.”

(Dillon) Giard said one farmer in his district with pays about $8,000 a year to have his milk hauled from Bridport to Middlebury.

If the milk was trucked to Massachusetts, he’d pay about $16,000. Giard said cutting hauling fees wouldn’t be the financial salvation for farmers. But he says it sends an important message.

(Giard) “So, will it save him? No, but it’s certainly an indication of hope.”

(Dillon) The Legislature last year looked at the fee issue. It ordered the state Agency of Agriculture to produce a report on the financial impact of shifting hauling fees to milk buyers, not farmers. That report is due next week.

For Vermont Public Radio, I’m John Dillon in Montpelier.

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