Compact Could Help Dairy Farmers from Becoming a Dying Breed
Posted April 25, 1999
RALEIGH — What is left of the dairy business in North Carolina may hinge on new legislation beforeCongress. A bill would establish theSouthern Dairy Compactas a way to control milk prices and keep dairy farmers in business.
Trying to get a leash on milk prices is a lot like taming an out-of-control heifer.
"While dairy farmers have been devastated by low prices, consumers have not benefited," saysRep. Bob Etheridge, (D) 2nd District.
Etheridge spoke during a news conference Monday on efforts to tame milk prices and save North Carolina's dairy industry. He will introduce legislation Tuesday to ratify the Southern Dairy Compact.
North Carolina is one of 11 states ready to form the compact. Four other states await their own legislative approval.
If ratified by Congress, the compact would form a commission made up of farmers, processors and consumers. They would decide how much milk should cost.
The idea is to discourage expensive milk imported from other regions and encourage local dairies.
"We've only got one experience of a compact for a dairy and that's in theNortheast," says Dr. Jeff Benson, an NCSU economist. "When the compact came in, prices were terribly low, so the compact set a price that seemed high at the time."
Milk prices rose 10 to 15 cents in the northeast but came back down to previous levels.
Compact supporters say the long-term benefit helps both farmers and consumers.
"We don't need to bring milk in here from California and New Mexico," saysGovernor Jim Hunt. "We can have North Carolina milk, fresh, good. And we need to make sure the farmers can make a living at it."
The current system allows price changes every month. The proposed compact would establish a set price for several months.
"So that flat price, it gives the farmers something to plan on, the processors something to plan on and the retail stores as well," says Benson.
Compact supporters hope the plan will tame the wild dairy business and lead it back to green pastures.
Senators John Edwards and Jesse Helms have both expressed support for the bill.