Input Sought On Requests To Alter Northeast Shipping Percentages

Shawn M. Boockoff, market administrator for the Northeast federal milk marketing order, is inviting comments from pool handlers to lower the shipping percentage for the months of September, October, and November from 20 percent to 10 percent until further notice.

Northeast order regulations state that in each of the months of September through November such shipments and transfers, by supply plants or qualified cooperative association handlers, to distributing plants must equal not less than 20 percent of the total quantity of milk that is received at the plant or diverted from it.

Under the order’s regulations, the applicable shipping percentages may be increased or decreased by the market administrator if it is determined that such adjustment is necessary to encourage needed shipments or to prevent uneconomic shipments. Boockoff’s office is commencing a formal assessment of milk supplies and market conditions relative to the demand for milk utilized as Class I and, in particular, for the upcoming months of September, October, and November.

Boonville Farms Cooperative Inc., Boonville, NY, was one of the two pool handlers that requested that the shipping percentage be decreased to 10 percent for the months of September through November. This decrease, originally requested by Queensboro Farm Products, has been repeatedly approved since 2013.

Boonville asserted that the market conditions on which these past petitions were granted remain today, and are unlikely to change.

Specifically, Boonville asserted the following justifications for granting its request:
• Class I utilization has seen a “significant reduction” over the last 20 years with the trend line showing a steady decline.
• Uneconomic shipments of milk will result from the higher 20 percent mandate. With local markets saturated, Boonville Farms will need to seek out sales to farther destinations, which will lead to much higher transportation costs, and the loss of premiums from milk diverted from well-established local customers.
• The current shipping provision of the order creates an unintended competitive disadvantage in the marketplace for smaller cooperatives – handlers.

The other request to lower the shipping percentages for September, October and November was submitted by Lowville Producers Dairy Cooperative and Canastota Dairy Products, LLC, the new owners of the former Queensboro Farm Products dairy plant located in Canastota,NY. The new owners of the plant, the owners have also had zero calls for Class I milk.

The constant decline of pool distributing plants associated with the Northeast order makes additional shipments into the remaining plants nearly impossible, Lowville and Canastota noted. Throughout the years, there has been a large decrease in the number of pool supply plants.

Over the last five years, US milk production growth went to Class III production as that is where most of the capacity additions were and are still trending, Lowille and Canastota continued. There are several new plants being built in New York state; some of those plants will be operational in 2024, others in 2025 and 2026. And there are several additional existing non-Class I plants which are planning to expand in the same timeframe.

With all these new expansions, the fear of Lowville and Canastota is that every single cooperative will be expanding to fulfill all this demand and it will trigger another set of problems.

Comments on these requests must be submitted by July 12, 2024, to: Northeast Marketing Area, 302A Washington Avenue Extension, Albany, NY 12203; Attention: Brian Riordon; or emailed to briordon@fedmilk1.com. Copies can be found on the Northeast order website, at www.fmmone.com.

In other Northeast order developments, pool handler Dairy Farmers of America (DFA) requested a temporary authorization allowing pool handlers to dispose of surplus milk at a farm or non-plant location, with said milk retaining the status of pooled producer milk.

The DFA request is in response to a combination of stronger-than-expected milk production and lower-than-expected Class I sales combining with significant plant operating issues related to power and equipment issues. Pool handlers Agri-Mark, Cayuga Marketing, Land O’Lakes, Maryland and Virginia Milk Producers Cooperative, and Upstate Niagara Cooperative submitted remarks either in support of, or did not oppose, DFA’s request.
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