jchneider *va£lety 'panmt &aintf, - irrc · re: marketwide pooling of the pmmb mandated...

jchneider*Va£lety 'panmt &aintf,

1860 East Third StreetWilliamsport, PA 17701-3992

Phone: (570) 326-20£lFax: (570) 326-2736

September 27,2001

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Sharon L. Grottola, Esq.Chief CounselPA Milk Marketing Board110 Agriculture Building2301 N. Cameron StreetHarrisburg, PA 17110

Dear Esquire Grottola:

I am writing this letter to show real concern over a proposal by the Pennsylvania Milk MarketingBoard to regulate the pooling of the Class I over-order premium. The Milk Marketing Board is proposingto pool 45% of the Class I over-order premium.

We have heard that mere has been a recommendation by the Farm Bureau and Land O' Lakes toincrease the percentage pooled to 90%. By doing this you would hurt the independent formers that choosenot to join a co-operative. It would also hurt co-operatives like DMS - DFA - and Dairylea that have a lotof Class I utilization.

Land O' Lakes co-operative is paying big premiums of three to four dollars and sending that milkfrom Pennsylvania to South East states such as North and South Carolina. These premiums are not sharedby the rest of the farmers in Pennsylvania

We, at Schneider-Valley Farms, believe if the pooling of the over-order premium is allowed it willhave an effect on the price of milk. Milk would automatically go up because the Class I formers will needmore money to produce the same milk. It would eliminate farmers because they could no longer becompetitive by sharing the over-order premium.

Schneider-Valley Farms strongly opposes pooling*

We hope you take a real hard look at this situation and vote against over-order pooling.

If you have any questions or comments, please do not hesitate to contact me. I thank you fortaking the time to read this communication. _

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! " • " • :

Robert K. H^MertzGeneral Manager

CO

WHOLLY OWNED SUBSIDIARY OF SCHNEIOER'S DAIRY.INC. PITTSBURGH, PA 15227AN EQUAL OPPORTUNITY EMPLOYER

Original: 2218

<-•*»t ±^i c'j hx 1 j - u COMMONWEALTH OF PENNSYLVANIA

MILK MARKETING BOARD

I , - - ' , ; - - , r .. . ; , : ^ r i - (

CHIEF COUNSEL October 1 1 , 2001 2301 NORTH CAMERON STREETHARRJSBURG, PENNSYLVANIA 17110-9408

TELEPHONE (717) 787-4374FAX (717) 783-6492

Michael A. Kane, General ManagerPocono Mountain DairiesP.O. Box 1006Blakeslee, PA 18610

Re: Marketwide Pooling of the PMMB Mandated Over-Order Premium

Dear Mr. Kane:

Thank you for your letter concerning Pocono Mountain Dairies opposition to theproposed regulation establishing a marketwide pool of the PMMB mandated over-orderpremium. In your letter you indicated several issues that I would like to address.

Pooling of the over-order premium will not add to the total paid to dairy farmersbut rather it is a distribution of premium dollars.

This is a true statement; however, pooling will make payment of this state mandatedpremium more equitable to a greater number of dairy fanners.

Pooling of the over-order premium will reduce the income of Pennsylvania farmerswho ship to Class I plants in Pennsylvania and will spread to all Pennsylvaniafarmers who ship to all Pennsylvania plants (Class I, II, and III).

This is a true statement; however, the reverse is true. The income of the Class II, III, andIV dairy farmer has been lower. These dairy farmers faced the same adverse conditionsupon which the over-order premium was based as did the Pennsylvania fanners who shipto Class I plants.

Large cooperatives that operate in many states will likely spread their premiumdollars to their entire membership with some of the premium going but-of-state.

Most cooperatives reblend receipts to their membership. The proposed regulationsrequire a line item on producers' checks indicating the PMMB premium amount Thepooled amount and hundredweight amount will be published in agricultural publicationseach month so farmers can hold their cooperatives or handlers accountable. Currentlyfourteen percent of the milk used in the production of Class I products is purchased out of ,state.

Mr. Michael KanePage TwoOctober 11, 2001

If the over-order premium is pooled, independent farmers who have done anexcellent job by producing qualify milk suitable for Class I markets will bepenalized for doing a good job.

According to the Pennsylvania Department of Agriculture, ninety-eight percent of allmilk produced in Pennsylvania is considered Grade A and thus meets the criteria to beshipped to a Class I processor.

There will be additional expense for the collection, disbursement, and auditing ofpooled funds.

We estimate the yearly cost to be $130,000. If the PMMB does not receive additionalfunding from the Legislature, we estimate the cost to be approximately $.005 perhundredweight

The percentage of the premium distributed is arbitrary and apparently an attemptto come to some type of compromise.

Yes, the percent was a compromise. The industry was asked to come together with acompromise and did not do so. One side remained at 0% and the other side compromisedfrom 100% to 90%.

If the premium is pooled within all classes of milk, fluid milk consumers willsubsidize the farmer that ships to a butter, powder, ice cream, or cheese plant

Yes, that is the procedure the federal pool plants use — a blend price made up from theweighed percentages of the four classes. Pennsylvania is the only regulated state thatmandates a premium not pooled marketwide.

A cooperative is allowed to reblend payments received from the plants they supply.If the goal of the cooperative is to increase the reblended price that they pay theirmembers, they should attempt to supply as many Class I markets as possible andrecover a larger share of the over-order premium.

That is also their desire; however, since Pennsylvania Class I utilization is fifty percent, itis an impossible dream.

Currently the proposed regulation is before the Independent Regulatory ReviewCommission and the Senate and House Agriculture and Rural Affairs Committees forconsideration and comments to the Board. Following its review, the Board will make

Mr. Michael KanePage ThreeOctober 11,2001

changes, if necessary, and submit the regulation in its final form to IRRC and theCommittees. An agency has two years to submit the final form regulation. When thefinal form regulation is prepared, you may receive a copy by providing a written requestto the Board or access the final form regulation on the Board's website athttp://www.sites.state.pa.us/PA Exec/Milk/.

Thank you again for your interest in the marketwide pooling of the mandatedover-order premium.

Very truly yours,

Through: ^yndaJ/Bowman'Secretary

j^lMTt^^r yJJ'UL^f^ A • J^U ffrti^Sharon L. GrottolaChief Counsel

Cc: Beverly R. Minor, ChairwomanLuke F, Brubaker, MemberBarbara A. Grumbine, Consumer Member

POCONOiiiiiiii DAIRIES.

P.O. BOX 1006 BLAKESLEE, PA 18610

1-800-922-6455 • 570-643-9838 • FAX 570-643-9836

September 28, 2001

Sharon Grottola, Esq.Chief CounselPA Milk Marketing Board110 Agriculture Building2301 North Cameron StreetHarrisburg, PA 17110

Dear Ms. Grottola:

This letter is in opposition to the proposed regulations to pool the over-order premium.

We are a small dairy cooperative (14 members) located in Northeast Pennsylvania. Inaddition to our fourteen members, we have 32 full-time employees at our distributionfacility in Blakeslee, Pennslyvania which operates under the trade name, PoconoMountain Dairies. Also, we have nine full-time employees at our Bloomsburg facilitythat operates as Breisch's Dairy, Inc.

We have been in business since 1940 and have operated under the rules and regulationsof the PMMB since then. Certainly we understand that rules change over time andbusinesses must conform to those changes. What we can not understand, however, ishow regulations can even be considered that will reduce the income of so manyindependent dairy farmers.

Some points to consider:

1. Pooling of the over-order premium will not add one dime to the total amountpaid to dairy farmers. It is simply a redistribution of premium dollars.

2. Pooling of the over-order premium will reduce the income of farmers inPennsylvania that ship to Class I plants in Pennsylvania. The amount takenfrom those fanners will be spread to all Pennsylvania farmers that ship to allPennsylvania Plants (Class I, II & III).

3. A large national coop like Land-o-Lakes that operate in many states will likelyspread their share of the premium over the entire membership thus having thepremium dollars that were intended to help and support Pennsylvania DairyFarmers moving out of state.

4. Some large cooperatives (i.e. Land-o-Lakes) have already demonstrated thatthey are willing and able to circumvent the intent of regulations by qualifyingmilk in various Federal Order Pools to their advantage. This is certainly notillegal; however, it certainly makes one wonder what they would do tomanipulate a statewide pool.

5. An over-order premium has been in affect for over thirteen years. WhenLand-o-Lakes was the supplier to a large number of Class I plants they weremute on the issue. In the last few years they have lost a large portion of thatbusiness. All of a sudden, they say the premium is unfair and should bepooled. If this happens, Independent Farmers that have done an excellent jobby producing quality milk suitable for Class I markets, will be penalized fordoing a good job. Does that make any sense?

6. There will be additional expense for the collection, disbursement and theauditing of the pooled funds. Who will pay for this? Most likely the DairyFarmers, which will mean even less to distribute.

7. The percentage of the premium to be distributed has no basis in soundeconomic study or in law. It is arbitrary, apparently in an attempt to come tosome kind of compromise. This fact alone can make pooling of the premiumopen to protracted legal challenges.

8. The premium as it exists today is an add-on to the Class I price. Therefore,the consumer of fluid milk pays for 100% of this additional premium. If thepremium is then pooled, the fluid milk consumer is then subsidizing theproducer that ships to a butter, powder, ice cream or cheese plant. Whyshouldn't the consumers of these products subsidize those producers? Doesthis open the PMMB up to a lawsuit by a Class I consumer group?

9. The milk marketing law allows a cooperative to "reblend" payments receivedfrom the various milk plants that they supply. Therefore, if a cooperativesupplies Class I and Class II plants, for example, they can then pay theirmembership one, reblended price so that all members are paid the same.Therefore, if their goal is to increase that reblended price that they pay theirmembership, they should attempt to supply as many Class I markets aspossible, By doing so they will be eligible to receive a larger share of the overorder premium. That is called sales and marketing. It appears, however, thatthe large coops would rather legislate higher prices for themselves at theexpense of many independents instead of working to expand their Class Imarkets.

Again, on behalf of Monroe County Milk Producers Cooperative Association, let meexpress our opposition to pooling the over-order premium in any form. It isdisappointing that the large cooperatives are attempting to take from Peter to pay Paulinstead of working to improve conditions for all dairy farmers.

Sincerely,

lichael A. KaneGeneral Manager

Original: 2218

k-i ^COMMONWEALTH OF PENNSYLVANIA


CHIEF COUNSEL October 11,2001 2301 NORTH CAMERON STREETHARRISBURG, PENNSYLVANIA 17110-9408

TELEPHONE {717) 787-4374FAX (717) 783-6492

Quintin F. Frey, PresidentTurkey Hill Dairy2601 River RoadConestoga,PA 17561-9630

Re: Marketwide Pooling of the PMMB Mandated Over-Order Premium

Dear Mr. Frey:

Thank you for your letter concerning the proposed regulations establishing amarketwide pool of the PMMB mandated over-order premium. In your letter youindicated four areas of concern. I have addressed each of these areas below.

The amount of premium paid to the farmer would be reduced and have less positiveeffect for Pennsylvania farmers.

The amount of the premium would not change unless processors alter their supplyarrangements and purchase out-of-state milk. Currently, approximately 14 percent ofmilk purchased by Pennsylvania processors as Class I milk comes from out of state.

If the premium is paid to a large national cooperative, there is no guarantee thepremium would go to Pennsylvania farmers.

The proposed pooling regulation requires that a line item be placed on theproducer's milk check in order for the cooperatives to receive the marketwide premiumpayment In addition, PMMB will publish the monthly redistribution rate in the farmingpublications.

If the premium were pooled, our plant would have more difficulty attracting rawmilk.

If this were to happen, the Board would be interested in knowing this. However,if the higher premium is needed to attract milk, that additional amount is included in theover-price premium calculation built into the minimum resale pricing.

Mr. Quintin F. FreyPage TwoOctober 11,2001

Class I milk supplies for consumers may not be sufficient to meet demand. Milk willbe pulled away from Pennsylvania.

Forty percent of Pennsylvania's milk supply is exported out of state. In otherareas of the country processors are able to secure milk under federal order poolingwithout any Class I premium.

Again, I would like to thank you for your participation in the regulatory process.You can receive a copy of the final-form regulations when they are completed, byproviding a written request to the PMMB or by accessing the PMMB website athttp://www.sites.state.pa.us/PA Exec/Milk/.

(ploi^Jj^Through: [/ RnwmatiLynda J/ Bowman

Secretary

Very truly yours,

Aharon L. GrottolaChief Counsel

cc: Beverly R. Minor, ChairwomanLuke F. Brubaker, MemberBarbara A. Grumbine, Consumer Member

September 28,2001 p 3COCDrr.

Sharon Grottola, Esq.Chief Counsel ^ ; 3PA Milk Marketing Board ^ ^ ~110 Ag Building P o t n ;;;2301 N. Cameron St. g : f"Harrisburg, PA 17110

Dear Ms. Grottola:

As the President of Turkey Hill Dairy, I am writing to oppose the Milk MarketingBoard's proposed regulation to pool the state Class I over-order premium (7 PA Code ch. 148).

The operation of our Turkey Hill Dairy plant in Pennsylvania employs over 500associates. We are the sixth largest producer of ice cream nationally and also process milk. Ourchain of over 230 convenience stores employs over 4,000 people and is a retailer of milk, icecream, and other dairy products.

Turkey Hill Dairy believes the current handler pool payment method is best for thelimited number of dollars involved. The Pennsylvania premium has been as low as 25 or 30cents per hundredweight. To set up a complicated, bureaucratic system to pool the premiummakes no sense for several reasons:

1. The amount of premium paid to the farmer would be reduced and have less positiveeffect for Pennsylvania farmers.

2. If the premium is paid to a large national cooperative, there is no guarantee thepremium would go to Pennsylvania farmers.

3. If the premium is pooled, our plant would have more difficulty attracting raw milk.4. Class I milk supplies for consumers may not be sufficient to meet demand. Milk will

be pulled away from Pennsylvania.

Please feel free to call me directly at (717) 872-5461 to discuss pooling in more detail orfor additional information. Thank you for your consideration of this very important issue.

Sincerely,

Quintin F. FreyPresident

Turkey Hill Dairy • 2601 River Road • Conestoga, PA 17516-9630Phone: 717 872-5461 • Fax: 717 872-4130 • www.turkeyhill.com

Original: 2218

COMMONWEALTH OF PENNSYLVANIAMILK MARKETING BOARD

DATE:

SUBJECT:

TO:

FROM:

October 11,2001

Letters Received Regarding 7 Pa. Code Section 148PA Over-Order Premium Pool Regulation, I.D. No. 47-9

Senate Agriculture and Rural Affairs CommitteeHouse Agriculture and Rural Affairs CommitteeIndependent Regulatory Review Commission

Sharon L. Grottola Jfouj{$«tf&->Chief Counsel r

Enclosed is a copy of a form letter received from a Pennsylvania producer alongwith a listing of producers who have sent this form letter to the Pennsylvania MilkMarketing Board. This form letter is in the same format as the one I sent you last week.The enclosed list of producers includes additional names to those already submitted toyou. The Board sent each producer a copy of a standard response that was provided toyou with our memorandum dated October 4,2001.

If you have any questions concerning this matter, please contact me.

Enclosures

C i

_ . , „ hrn c c The Honorable Michael WaughOctober i, 2001 __ °

The Honorable Raymond Bunt Jr.

John R. McGinley, Jr., IRC Chair

Dear Chairperson Beverly Minor;Although I commend the Pennsylvania Milk Marketing Board on its decision to pool the Over-OrderPremium, I support a regulation for 90% pooling. Pooling the premium is a regulatory issue and doesnot affect consumers at all. However, it does affect dairy producers.

Even at 45% pooling, one producer may be getting as much as $3,500 more from the premium thananother. Both produce the same quality milk and have the same production costs. It is unfair that oneproducer should receive a greater benefit than the other does. 90% is the only way to create a fair andequitably distributed premium system in Pennsylvania.

If pooling is the right thing to do, then it shouldn't be half done. Please change the proposedregulation so that 90% pooling of the premium is pooled among all dairy producers.

Sincerely yours,

^^tlt) [in .{/\\fyiUtuii^ (NAME)

Dairy Producer who milks J& cows in ( .LJt&tts} County, PA.

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Crist & Joyce Shearer5011 Shady Dell RoadDover, PA 17315

G. K. Glick1257 Georgetown RoadQuarryville, PA 17566

Donald Windle, Jr.433 Gum Tree RoadCoatesville, PA 19320

Alan & Marian Martin102 Spangler RoadLebanon, PA 17042

Christopher & Jody Brechbill3364 Mont Alto RoadFayetteville, PA 17222

Curt Sweinhart579 Texas Corner roadNew Entrprise, PA 16664-7919

Harold Hoffeditz4652 Mercersburg RoadMercersburg, PA 17236-9602

Dean Solllenberger2504 Pioneer DriveSaint Thomas, PA 17252-9705

Andy & Sara Mohr227 Mohrs LaneNew Enterprise, PA 16664

Russell DressierRR1, Box 2895McAlisterville, PA 17049

David Fisher183 Valley RoadEtters,PA 17319-9561

Andy & Robin SwartzRR 1, Box 593Port Royal, PA 17082

Richard WhiteRR 4, Box 139Montrose,PA 18801

Samuel & Rebecca Kauffman1034 Prawls Hollow RoadPeach Bottom, PA 17563

Glenn Brewer19 Remington RoadTunfchannock, PA 18657

Robert DrakeRD 2, Box 509Strousburg, PA 17837

Dwayne & Karen PeiferPei-Valley Farm235 Academy RoadKirkwood,PA 17536

Edwin Zimmerman2300 Main StreetNarvon,PA 17555

James & Alma BurkholderRR 3, Box 350Mifflinburg, PA 17844

Paul & Linda Stoss1900 Germans RoadLehighton,PA 18235

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Samuel MatthewsMilky Way FarmChester Springs, PA 19425

Edmund YostTri-Y Farms50Tri-YLaneBernville,PA 19506

J. MullenRD 2, Box 142ACanton, PA 17724

Larry & Sue Hartranft51A Parkside Inn RoadBernville,PA 19506

Russell Wyles5302 Woodbury PikeRoaring Spring, PA 16673

Richard Schlegel6404 Oley Turnpike Rd.Oley,PA 19547-8941

Eli King376 Buck Hill RoadParadise, PA 17562

Walter MooreWalmoore Holsteins Inc.PO Box 158Chatham, PA 19318

Michael & Linda BehrerWillow Behrer FarmHC-01, Box 103-ASpruce Creek, PA 16683

Ralph RispoliRR1 Box 192Williamsburg, PA 16693-9716

Rodney Marshall3928 Berrket RoadTyrone, PA 16686

Eli & Martha Smucker211 Phillips RoadMillersburg, PA 17061

Elmer Stoltzfus, Jr.233 Stoltzfus LaneMill Hall, PA 17751

C. LaRue & Susan WakelyRR 2, Box 219Ulster, PA 18850

Andrew Stoltzfus5674 Street RoadKirkwood,PA 17536-9546

Don Landis9 Mill RoadMyerstowrvPA 17067

Richard & Betty WoodruffRD 5 Box 278Danville, PA 17821

Elwood Vaughan363 Vaunholm RoadMcVeytown,PA 17051

Roland Pecht3326 Honey Creek RoadMilroy,PA 17063

Merle & Bertha Ocker4675 Ft. McCordChambersburg, PA

Creek-Knoll Farms805 Pequea Creek RoadPequea, PA 17565

C. A. BaughmanPO Box 134Fay, PA 17222

Jay Geissinger2800 Old Beth PikeQuakertown, PA 18951

Raymond LoomisRD 1 Box 1262Waymart,PA 18472

Mr. & Mrs. Elmer High255 Middle Creek RoadLititz,PA 17543-9197

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Paul Detweiler, Jr.156 Snow Hill RoadNew Enterprise, PA 16664

Jim & Kevin LeidyL&L Holsteins3122 Lafayette RoadNew Enterprise, PA 16664

Jean Dotterer6795 Nittany Valley DriveMill Hall, PA 17751

Wayne Beidel8906 Mowersville RoadNewburg,PA 17240-9705

Dale Hostetter & Son439 Hostetter LaneAnnville,PA 17003-9617

Randall SmithRD 2 Box 120AWilliamsburg, PA 16693

John & Rita Stump306 Snyder School RoadBernville,PA 19506

Walter CorneliusCornelius BrothersR. Box 1240Mapleton Depot, PA 17052

Henry King45 Little Beaver RoadStrasburg,PA 17579

Boyd Weary555 Carlisle RoadNewville,PA 17241-9568

Andrew YoungRed Knob Farm322 Balance Meeting RoadPeach Bottom, PA 17563

Stanley MeyersMeyersland Dairy5144 Woodcove RoadGreencastle, PA 17225

Charles Divelbiss12861 Johnstons LaneMercersburg, PA 17236

Jeremiah Sensenig2671 Noble RoadQuarryville, PA 17566-9638

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Harry Zimmerman252 Weaneland Valley RoadEast Earl PA 17519

Menno HostetlerRD I, Box 396AWilliamsport PA 17772

Aaron Stoltzfus222 S. Kinzer RoadParadise PA 17562

Samuel King897 Swan RoadAtglen PA 19310-1722

Calvin WillNorthview Farm Inc.2801 Brotherton RoadBerlin PA 15530-7328

Isaac Stoltzfus303 Peach Bottom RoadPeach Bottom PA 17563-9708

Lynn ChamberlinChamberlin Fairview Farm706 Chenny LaneClearville PA 15535

Samuel Stoltzfus510 Furnace RoadQuarryville PA 17566-9422

Larry Hege712 Kauffman Rd WGreencastle PA 17225-9728

Lakee & Linda Christman7623 Valley View LaneGreencastle PA 17235

Kore & Susanna Yoder3275 Front-Mountain RoadBelleville PA 17004

J, Calvin Zimmerman710 Schaeffer RoadLebanon PA 17042-9718

Delmar Weever240 Snapper LaneLykens PA 17048

John & Laurene ZimmermanRD 2 Box 255Myerstown PA 17067

Clarence MarbakerRD 4, Box 136Montrose PA 18801

David LongenbachRed-Mapl-Spring FarmR #4 3706 Magnolia DriveNorthampton PA 18067-9642

David Beiler515 A Gibbons RoadBird-In-Hand PA 17605

Dave GarberSpring Lawn Farm248 Stoney LaneLancaster PA 17603

Mr. & Mrs a Ray Seidel391 Balthaser RoadLenhartsville PA 19534-9141

Nelson Nolt45 Frosty Hollow RoadWoodbury PA 16695

Paul RobbinsBox 344 RD #2Ulster PA 18850

Donald & Malia ShoopRR 1 Box 181 AEast Waterford PA 17021

William Gulick IIIRR 1 Box 1693Laceyville PA 18623

H & H Dairy4659 Mercersburg RoadMercersburg PA 17236-9602

Kay & Edr-Kulp593 Spiece RoadPottstown PA 19465

Amos King1848 Susquehannock DriveDrumore PA 17518

Laban & Daniel Kutz75 Klick DrivePine Grove PA 17963

Dale Weiler1657 Union Grove RoadEast Earl PA 17519

Harold & Shirley Fryer227 E. Schmaltzdahl RoadNew Ringgold PA 17960

Carl & Ida Close7381 Brodbeck RoadGlen Rock PA 17327

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COMMONWEALTH OF PENNSYLVANIA


CHIEF COUNSEL

October 2001

2301 NORTH CAMERON STREETHARRISBURG, PENNSYLVANIA 17110-9408

TELEPHONE (717) 787-4374FAX (717) 783-6492

Dear Pennsylvania Producer:

Thank you for your recent comments regarding the decision of the PennsylvaniaMilk Marketing Board to establish a marketwide pool of the mandated over-orderpremium. You expressed your support of 90% pooling rather than the 45% selected bythe Board. As you know, the pooling issue was heavily debated by both those for a pooland those against one. Currently the proposed pooling regulations are before theIndependent Regulatory Review Commission (IRRC) and the House and SenateAgriculture and Rural Affairs Committees for consideration and comments to the Board.Following their review, the Board will make any changes, if necessary, and submit theregulation in its final form to IRRC and the Committees. An agency has two years tosubmit the final form regulations. When the final form regulations are prepared, youmay receive a copy by providing a written request to the Board or access the final formregulations on the Board's website at http://www.sites.state.pa.us/PA Exec/Milk/.

Thank you again for your interest in a marketwide pool of the mandated over-order premium.

Very truly yours,

Through:

JjLtiAnJjf. #U££+iA_,tynda J. Bowman

"SecretarySharon L. GrottolaChief Counsel

cc: Beverly R. Minor, ChairwomanLuke F. Brubaker, MemberBarbara Grumbine, Consumer Member

Pagel ofl

Original: 2218

Grottola, SharonFrom: brandts5 [[email protected]] r _ , r , ^ n ... r,4 , 0

Sent: Thursday, October 11, 2001 8:12 PM

To: [email protected] r V^;Q:J

Cc: [email protected]

Subject: over-order milk premium

Attn. Honorable Sharon Grottola,

Hello, my name is Daniel Brandt and I am a dairy farmer in Lebanon County. I am also our county HolsteinClub president and a Farm Bureau director. I ship milk to Wengerts Dairy located here in the county. I wouldencourage you to vote NO to the proposed regulation that would pool a percentage of the over-order premiumpaid on bottled milk. Pooling is a socialistic view that would take away the premium paid to those who haveworked to create a market and their farmers who have met the challenge of more stringent milk qaulitystandards. Please keep me updated on the status of this at e-mail [email protected]. Also, vote like anAmerican not a Socialist.

Sincerely,Daniel Brandt

10/15/2001

Grottola, Sharon

From: Grottola, SharonSent: Monday, October 15, 2001 8:34 AMTo: 'brandtsSigmsn.com'Cc: Bowman, LyndaSubject: marketwide pooling

Dear Mr. Brandt:

Thank you for your recent comments regarding the decision of the Pennsylvania Milk Marketing Board toestablish a marketwide pool of the mandated over-order premium. You expressed your opposition to pooling. As youknow, the pooling issue was heavily debated by both those for a pool and those against one. Currently the proposedpooling regulations are before the Independent Regulatory Review Commission (IRRC) and the House and SenateAgriculture and Rural Affairs Committee for consideration and comments to the Board. Following their review, the Boardwill make any changes, if necessary, and submit the regulation in its final form to IRRC and the Committees. An agencyhas two years to submit the final form regulation. When the final form regulations are prepared, you may receive a copyby providing a written request to the Board or access the final form regulation on the Board's website athttp://www.sites.state.pa.us/PA_Exec/Milk/. Thank you again for your interest in the pooling regulations.

Sharon GrottolaChief CounselTracking: Recipient Delivery

'brand [email protected]'

Bowman, Lynda Delivered: 10/15/2001 8:34 AM

Original: 2218

r^ - ~ - ^ - • * - , . f _ . ..^

10/10/01

^ ; 0 u n An S:J*5

From: Stanley Brubaker P E\;, . i c- \Brubaker's Dairy Farm % 7 LUl ^ I S S I ° -32 S.R. 49Westficld, PA 16950-1411

To: John R. McGinley, Jr., IRC Chairperson

In the name of fairness, I am writing to you in regards to the Pennsylvania MilkMarketing Board's regulation to pool 45% of the Pennsylvania Over-Order Premium. Iam a dairy farmer and milk 80 cows in Tioga County. Although I agree with thePMMB's decision to pool the Over-Order-Premium, I feel strongly that 90% pooling isthe only fair way to create an equitable distributed premium system that benefits allPennsylvania dairy farmers. If pooling the premium is the right thing to do, then itshouldn't be done halfway, and have few farmers benefit from it.

The Over-Order Premium was created to help dairy farmers when faced with economicand weather-related hardships. Unfortunately, while this premium is extremely beneficialto some, it is inequitably distributed so that the majority of the proceeds go to a smallminority of farmers. I produce the same quality milk under the same economic conditionsas my neighbor does. Yet, even at 45% pooling, he could sill be getting as much as$3,500 more annually through the premium distribution process. That just doesn't seemfair.

Consumers fund this premium through an 11.5-cent surcharge on every gallon of fluidmilk sold in Pennsylvania. The level the premium is pooled would not affect the amountthat the consumer pays. While I am grateful that these consumers want to helpPennsylvania dairy farmers produce quality products, I am also certain that they wouldwant any assistance to be equitably distributed among all farmers.

Dairy farmers are in an increasingly competitive industry, and we must have access to afair price for our milk. That includes having the same access to premiums that ourneighbors do. Please approve a regulation to pool 90% of the Pennsylvania Over-Order Premium to benefit all Pennsylvania dairy farmers.

Sincerely yours,

Stanley Brubaker

ly yours,

- Tit*ii1-*olro-r •

Home of the "Eve" Family

%otik View *$am 3 mWILLSHOLM HOLSTEINS

Calvin M. Will Daniel J. WillJames K. Will John C Will

R.-D.-lTBcnrlfld - Berlin, Pennsylvania 15530= Phone: 814 - 267-4063 or 267-5015

2801 Brotherton Road

Original: 2218

The Honorable Tnh^ ft , Mrtt-inigy, J r . ,

Dear TSir, :

I am a dairy farmer in Somerse t county, Pennsylvania milkin^^cows. I am also amember of Maryland & Virginia Milk Producers Cooperative Association, a farmerowned cooperative. I commend the Pennsylvania Milk Marketing Board on its decisionto pool Over Order Premiums. I strongly support a regulation for 90% pooling. Sincepooling of the premium is a regulatory issue, it does not effect consumer prices.However, it does effect dairy farmer prices. A 90% pooling would equitably distributethe premium dollars to those producers (mainly co-op members like myself) who actuallybear the cost of serving the market and balancing the seasonal swings in production.

Producers, both co-op members and independents (who sell directly to a handler), havemilk of a similar quality with similar production costs. Without 90% pooling, theindependent producer will get a disproportionate share of the premium dollar withoutsharing any cost in serving the market.

90% pooling is the only way to fairly dispense the premium dollars so they will actuallygo back to the producers who are bearing the cost of serving the market. We stronglyurge you to change the regulation and adopt a 90% pooling requirement.

If you have any questions, feel free to contact me foome s or our co-op contact, JimHowie at 1-800-552-1976, ext. 432. Your positive response to this issue will affect alldairy farmers in Pennsylvania. Thank you for your time. _

Sincerely,

CMW/mew

Original: 2218

October 9, 2001

Beverly Minor, ChairpersonThe Pennsylvania Milk Marketing Board . , ;2301 North Cameron StreetHarrisburg, PA 17110

Dear Chairperson Minor,

In the name of fairness, I am writing to you concerning the Pennsylvania Milk Marketing Board'sregulation to pool 45% of the Pennsylvania Over-Order Premium. I am a dairy farmer and milk 550cows in Adams County. Although, I agree with the PMMB's decision to pool the Over-OrderPremium, I feel strongly that 90% pooling is the only fair way to create an equitably distributedpremium system that benefits all Pennsylvania dairy farmers. All dairy farmers have the sameexpenses, regardless where they sell their milk. Pooling the premium is the right thing to do. Therefore,it shouldn't be done only halfway.

The Over-Order premium was created to help dairy farmers when faced with economic and weather-related hardships. Unfortunately, while this premium is extremely beneficial to some, it is inequitablydistributed so that the majority of the proceeds go to a small minority of farmers. I produce the samequality milk under the same economic conditions as my neighbor. Yet, even with 45% pooling, hecould still be getting as much as $.71 per hundred-weight more through the premium distributionprocess. Tliree out of four partners in our dairy are under 35 years of age and are struggling to getestablished in the dairy business. Ninety percent pooling could be very helpful in these partners growthin the dairy business.

Consumers fund this premium through an 11.5 cent surcharge on every gallon of fluid milk sold inPennsylvania. The level the premium pooled would not affect the amount that the consumer pays.While I am grateful that these consumers want to help Pennsylvania dairy farmers produce qualityproducts, I am also certain that they would want any assistance to be equitably distributed among allfarmers, regardless which market they choose.

Dairy farmers are in an increasingly competitive industry, and we must have access to a fair price forour milk. That includes having the same access to premiums that our neighbors do. Please approve aregulation to pool 90% of the Pennsylvania Over-Order Premium to benefit all PA dairy farmers.

Sincerely yours,

HessHolstein Farm, LLC

Cc: The Honorable Raymond Bunt, JrThe Honorable Terry PuntJohn R. McGinley, Jr., IRC ChairpersonRepresentative Steve Maitland

Michael A, NickOriginal: 2218 H B H R&* Box607

Fredericktown, PA 15333-9801

October 9, 2001

Beverly Minor, ChairpersonThe Pennsylvania Milk Marketing Board2301 North Cameron StreetHarrisburg, PA 17110

Dear Chairperson Minor;

In the name of fairness, I am writing to you in regards to the Pennsylvania Milk Marketing Board'sregulation to pool 45% of the Pennsylvania Over-Order Premium^I am a dairy farmer member of DairyFarmers of America, Inc. and milk j ^ c o w s ii^^4^^fiCSnougn I agree with the PMMB's decision topool the Over-Order Premium, I feel strongly that 90% pooling is the only fair way to create an equitablydistributed premium system that benefits all Pennsylvania dairy farmers. If pooling the premium is the rightthing to do, then it shouldn't be done halfway.

The Over-Order Premium was created to help dairy farmers when faced with economic and weather-relatedhardships. Unfortunately, while this premium is extremely beneficial to some, it is inequitably distributedso that the majority of the proceeds go to a small minority of farmers. I produce the same quality milkunder the same economic conditions as my neighbor does. Yet, even at 45% pooling, he could still begetting as much as $3,500 more annually through the premium distribution process. That just doesn't seemfair.

Consumers fund this premium through an 11.5-cent surcharge on every gallon of fluid milk sold inPennsylvania. The level at which the premium is pooled would not affect the amount that the consumerpays. While I am grateful that these consumers want to help Pennsylvania dairy fanners produce qualityproducts, I am also certain that they would want any assistance to be equitably distributed among allfarmers.

Dairy farmers are in an increasingly competitive industry, and we must have access to a fair price for ourmilk. That includes having the same access to premiums that our neighbors do. Please approve a regulationto pool 90% of the Pennsylvania Over-Order Premium to benefit all Pennsylvania dairy farmers.

Sincerely yours,

NAME

ex. The Honorable Raymond Bunt, Jr.The Honorable Michael WaughJohn R. McGinley, Jr., IRC ChairpersonYOUR SENATORYOUR LEGISLATOR

Original: 2218

Winding~l\uft Earai

October 9, 2001

175 lAndcy BoadSlippery Hock, PA l«057(724) 794-5123windingtrailfarm@earthlink net

Sharon Grattola* Esquire, Chief CounselPennsylvania Milk Marketing Board110 Agricultural Bldg., 2301 North Cameron StreetTTarrisburg, PA 17110

Dear Ms. Grattola*

We are a nine generation dairy farm family who has struggled for many years tomake a living as a producer in the dairy industry- We are grateful for all thehelp of the premium paid on milk above the Federal order price on the Class Imilk.

Unlike the large corporations, the small family dairy fanner, strugglesincreasingly as years gp on. With the larger corporations growing and"consuming'* the family farmer, we have to stick together when the largecorporations want to take over even more.

One of these large corporations that is consuming the small farmer is Land OLakes. Land O* Lakes sells very little milk in Pennsylvania* yet they would liketo take an extra premium, while the other farmers would not receive thispremium.

Our family, as well as others, opposes the pooling of the (Haas I premium. Inaddition, we are asking for your support and not to let Land O' Lakes and othersreceive the extra prexnium on Class 1 milk.

Sincerely,

z$U*^y- C^r^ J6,JJJ^ L*«pj^Q*JU- G * * ^

Winding Trail Farm

The Wade Cooper Family

i-zCe-C^

Original: 2218

Stoner's Hijos Hill, Inc.7678 Oellig Road

Mercersburg, PA 17236L. \> v'

FO^'-'F.O

0CT12 Pii 2=55

KtVil:*'* CO/ii .iSSiQN

October 9, 2001

Dear Mr. McGinley:

J am a dairy farmer in Franklin County, Pennsylvania. My family milks 550 cows. I am alsoa member of Maryland & Virginia Milk Producers Cooperative Association, a farmer ownedcooperative. I commend the Pennsylvania Milk Marketing Board on its decision to poolOver Order Premiums. I strongly support a regulation for 90% pooling. Since pooling of thepremium is a regulatory issue, it does not affect consumer prices. However, it does affectdairy farmer prices. A 90% pooling would equitably distribute the premium dollars to thoseproducers (mainly co-op members like myself) who actually bear the cost of serving themarket and balancing the seasonal swings in production.

Producers, both co-op members and independents (who sell directly to a handler), have milkof similar quality and similar production costs. Without 90% pooling, the independentproducer will get a greater share of the premium dollar while sharing none of the cost inserving the market. As you can see, a 90% pool is the only fair method to dispense premiumdollars to co-op producers who bear the majority of the cost to serve the market. Therefore, Istrongly urge you to change the regulation and adopt a 90% pooling requirement.

If you have any questions, feel free to contact me at (717) 328-4483, or our co-op contact,Jim Howie at 1-800-552-1976, ext. 432. Your positive response to this issue will impact alldairy farmers in Pennsylvania, Thank you for your consideration.

rely,

S=teTim Stoner, PresidentStoner's Hijos Hill Inc

O r i g i n a l : 2218

October 9, 2001

Beverly Minor, ChairpersonThe Pennsylvania Milk Marketing Board2301 North Cameron StreetHamsburg, PA 17110


In the name of fairness, I am writing to you in regards to the Pennsylvania Milk Marketing Board'sregulation to pool 45% of the Pennsylvania OverjOrder PremiumJ am a dairy farmer member of DairyFanners of America, Inc. and milk^£fcows i n J ^ ^ ^ f i C ^ o u g n I agree with the PMMB's decision topool the Over-Order Premium, I feel strongly that 90% pooling is the only fair way to create an equitablydistributed premium system that benefits all Pennsylvania dairy farmers. If pooling the premium is the rightthing to do, then it shouldn't be done halfway.


Consumers fund this premium through an 11.5-cent surcharge on every gallon of fluid milk sold inPennsylvania. The level at which the premium is pooled would not affect the amount that the consumerpays. While I am gratefui that these consumers want to help Pennsylvania dairy fanners produce qualityproducts, I am also certain that they would want any assistance to be equitably distributed among allfanners.

Dairy fanners are in an increasingly competitive industry, and we must have access to a fair price for ourmilk. That includes having the same access to premiums that our neighbors do. Please approve a regulationto pool 90% of the Pennsylvania Over-Order Premium to benefit all Pennsylvania dairy farmers.

Sincerely yours,

NAME

c.c. The Honorable Raymond Bunt, Jr.The Honorable Michael WaughJohn R. McGinley, Jr., IRC ChairpersonYOUR SENATORYOUR LEGISLATOR

Original: 2218

October 5, 2001

Beverly Minor, Chairperson , : •j

PA Milk Marketing Board ~ ---•••- *

Dear Ms. Minor,

We are dairy farmers in Bedford County, Pennsylvania milking 90 cows. We arealso members of Maryland & Virginia Milk Producers Cooperative Association, afarmer owned cooperative. I commend the Pennsylvania Milk Marketing Board onits decision to pool Over Order Premiums. I strongly support a regulation for 90%pooling. Since pooling of the premium is a regulatory issue, it does not affectconsumer prices. However, it does affect dairy farmer prices. A 90% poolingwould equitably distribute the premium dollars to those producers (mainly co-opmembers like myself) who actually bear the cost of serving the market andbalancing the seasonal swings in production.

Producers, both co-op members and independents (who sell directly to a handler),have milk of a similar quality with similar production costs. Without 90% pooling,the independent producer will get a disproportionate share of the premium dollarwithout sharing any cost in serving the market.

90% pooling is the only way to fairly dispense the premium dollars so they willactually go back to the producers who are bearing the cost of serving the market.We strongly urge you to change the regulation and adopt a 90% poolingrequirement.

If you have any questions, feel free to contact us, or our co-op contact, Jim Howie

at 1-800-552-1976, ext 432. Your positive response to this issue will affect all

dairy farmers in Pennsylvania. Thank you for your time-

Sincerely,

Steven D, Llewellyn Donald L. Llewellyn814-356-3295 [email protected] tvedon(5)charter.net

Original: 2218

S: 10

October 9, 2001

Beverly Minor, ChairpersonThe Pennsylvania Milk Marketing Board2301 North Cameron StreetHarrisburg, PA 17110


In the name of fairness, I am writing to you in regards to the Pennsylvania Milk Marketing Board'sregulation to pool 45% of the Pennsylvania Over^Order PremmrrL I am a dairy farmer member of DairyFarmers of America, Inc. and m i l k ^ f c o w s iqJk*diAy$^o\$ I agree with the PMMB's decision topool the Over-Order Premium, I feel strongly that 90% pooling is the only fair way to create an equitablydistributed premium system that benefits all Pennsylvania dairy farmers. If pooling the premium is the rightthing to do, then it shouldn't be done halfway.


Consumers fund this premium through an 11.5-cent surcharge on every gallon of fluid milk sold inPennsylvania. The level at which the premium is pooled would not affect the amount that the consumerpays. While I am grateful that these consumers want to help Pennsylvania dairy farmers produce qualityproducts, I am also certain that they would want any assistance to be equitably distributed among allfanners.

Dairy farmers are in an increasingly competitive industry, and we must have access to a fair price for ourmilk. That includes having the same access to premiums that our neighbors do. Please approve a regulationto pool 90% of the Pennsylvania Over-Order Premium to benefit all Pennsylvania dairy farmers.

Sincerely yours,

NAME

c.c. The Honorable Raymond Bunt, Jr.The Honorable Michael WaughJohn R. McGinley, Jr., IRC ChairpersonYOUR SENATORYOUR LEGISLATOR

Original: 2218

PaulDottereraSons,lnc.6795 Nittany Valley Drive

Mill Hall, Pa. 17751Phone (570) 726-6720

Fax (570) 726 6657

October 09, 2001

nv.-;

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CD

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IP

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en

rno

•:-n

aDear Chairperson Beverly Minor,

The Pennsylvania Milk Marketing Board made a decision to pool the Over-Order Premium, ofwhich I support. This regulation of 90% pooling, I support, and Realize this is a regulatory issueand does not affect consumers at all. However, it does affect the Dairy Producer.

Even at 45% pooling, one producer may be getting as much as $3,500 more from premium thananother. Both produce the same quality milk, and have the same production costs. It is unfair thatone producer should receive a greater benefit than the other. 90% is the only way to create afair and equitable distributed premium in Pennsylvania,

If pooling is the correct thing to do, it shouldn't be half done. Please Change the proposedregulations so that 90% pooling, of the premium, is pooled among all Dairy Producers

Sincerely,

t-Jean Dotterer

We are a Dairy Producer who milks 600 Cows in Clinton County

c.c. The Honorable Michael WaughThe Honorable Raymond Bunt, Jr.John R.Ginley Jr., IRC ChairRepresentative Michael HannaSenator Rick Santorium

Original: 2218

L&L HolsteinsJim Leidy & Kevin Leidy ptn

3122 Lafayette RdNew Enterprise, PA 16664

October 8, 2001

John R, McGinley, Jr, ChairIndependent Regulatory Commission14th Floor Harristown 2;333 Market StreetHarrisburg, PA 17101

Dear Chair McGinley:

We are a father and son dairy partnership in Bedford county, Pennsylvania. We milk180 cows. As a member of Maryland&Virginia Milk Producers Cooperative Associationwe want to commend the Pennsylvania Milk Marketing Board on it's decision to poolOver order Premiums. We strongly support a regulation for pooling for 90 percent. Consumerprices would not be affected due to premium pooling being a regulatory issue. This does,however affect dairy farmer prices. A pooling of 90 percent would equitable distribute thepremium dollars to those producers, mainly members of co-op like ourselves, who actuallyshoulder the cost of serving the market and balancing the seasonal swings in production.

Without pooling of 90 percent, the independent producer will get a disproportionate share of thepremium dollar without sharing any cost in serving the market. We feel that 90 percent pooling isthe only fair way to dispense the premium dollars so they will actually go back to the producerswho bear the cost of serving the market. We strongly urge you to change the regulation andadopt a 90 percent pooling requirement.

Feel free to contact us if you have any questions at 814 224-2805 or contact our co-op: JimHowie at 1-800-552-1976, ext 432. Your positive response and action to this issue will affect alldairy farmers in Pennsylvania. Thanks so much for your time and consideration.

Sincerely,

Jim Leidy & Kevin Leidy

•,„.. r--"»yw» nowntw Btfwpfht, PA 1666* 9«43

Original: 2218

October 8, 2001

Dear Chairperson McGinley, Jr.

I am writing to you in regards to the Pennsylvania Milk MarketingBoard's regulation to pool 45% of the Pennsylvania Over-Order Premium.My brother and I farm in Franklin County and milk 150 cows. I agree weneed to pool the Over-Order Premium, but I think 90% pooling is the fair wayto create an equitable distributed premium system that benefits allPennsylvania dairy farmers.

The Over-Order Premium was created to help all farmers. Not one hereand there. We all produce milk under the same economic conditions. Whyshould one receive more than the other. At 45% pooling my neighbor couldreceive as much as $3,500 more annually through the premium distributionprocess. 90% would benefit all Pennsylvania farmers.

Consumers would not be affected by 90% pooling. I am sure theywould want the 11.5-cent surcharge on a gallon of milk to be equitablydistributed among all farmers.

Our family farm must get a fair price for our milk. We are in a verycompetitive industry and everyone should receive the same premium.

PLEASE APPROVE A REGULATION TO POOL 90% OFTHE PENNSYLVANIA OVER-ORDER PREMIUM.

Sincerely Yours,

few y~ &tiiyifVJL

ex. The Honorable Raymond Bunt, Jr.The Honorable Michael WaughBeverly Minor, PMMB ChairpersonSenator Terry PuntRepresentative C. Allan Egolf

f^/AYNELBEIDEL - ^ I

I 8S06MOWERSV1LLEROAQ S ^ E * •j NEWBURG, PA 17240 vKpl

Original: 2218 f\ Llewellyn Brothers5114 Bedford Valley Road

Bedford, PA 15522

October 5, 2001

£*••; if

-•••• - • - r'.,.: > Jl

John R. McGinley, Jr., ChairIndependent Regulatory Commission ~ : - J '

Dear Mr. McGinley,

We are dairy farmers in Bedford County, Pennsylvania milking 90 cows. We arealso members of Maryland & Virginia Milk Producers Cooperative Association, afarmer owned cooperative. I command the Pennsylvania Milk Marketing Board onits decision to pool Over Order Premiums. I strongly support a regulation for 90%pooling. Since pooling of the premium is a regulatory issue, it does not affectconsumer prices. However, it does affect dairy farmer prices. A 90% poolingwould equitably distribute the premium dollars to those producers (mainly co-opmembers like myself) who actually bear the cost of serving the market andbalancing the seasonal swings in production.



If you have any questions, feel free to contact us, or our co-op contact, Jim Howieat 1-800-552-1976, ext 432. Your positive response to this issue will affect alldairy farmers in Pennsylvania. Thank you for your time.

Sincerely,

Steven D. Llewellyn Donald L, Llewellyn814-356-3295 [email protected] [email protected]

Original: 2218

October 5, 2001

Beverly Minor, ChairpersonThe PA Milk Marketing Board2301 N. Cameron St.Harrisburg, PA 17110


I want to take this opportunity to thank you for your commitment and involvement inthe PA Milk Marketing Board. I am a dairy farmer in Franklin County who ships to acooperative.

While I fully support the PMMB decision to pool the Over-Order Premium, I feel itneeds to be distributed in a much more equitable fashion. At 45% pooling, there is alarge disparity between those who ship to a Total Class 1 dealer and those of us who shipto co-ops who provide a variety of classes, of milk products. We coops, in reality,balance the market for the fluid business and get a much smaller portion of the premium.We produce the same quality milk at the same cost of production, as those shipping to aClass 1 dealer, but we receive a much lower premium.

Therefore, I am asking you to please approve a regulation to pool 90% of the PA Over-Order Premium to benefit ALL PA dairymen, realizing this is not going to affectconsumers.

Sincerely yours,

j/My CJffljVStanley C. Meyers

cc. The Honorable Raymond Bunt Jr.The Honorable Michael WaughJohn R. McGinley Jr. IRC ChairpersonThe Honorable Michael A. O'PakeThe Honorable Peter J. Daley II

MEYERSIAND DAIRY5 144 Woodeove Rd.

Greencastle, PA 17225

Original: 2218 .

October 5, 2001

Beverly Minor, ChairpersonPA Milk Marketing Board : - -

Dear Ms. Minor,

We are dairy farmers in Bedford County, Pennsylvania milking 90 cows. We arealso members of Maryland & Virginia Milk Producers Cooperative Association, afarmer owned cooperative. I commend the Pennsylvania Milk Marketing Board onits decision to pool Over Order Premiums. I strongly support a regulation for 90%pooling. Since pooling of the premium is a regulatory issue, it does not affectconsumer prices. However, it does affect dairy farmer prices. A 90% poolingwould equitably distribute the premium dollars to those producers (mainly co-opmembers like myself) who actually bear the cost of serving the market andbalancing the seasonal swings in production.



If you have any questions, feel free to contact us, or our co-op contact, Jim Howieat 1-800-552-1976, ext 432. Your positive response to this issue will affect aildairy farmers in Pennsylvania. Thank you for your time.

Sincerely,

Steven D, Llewellyn Donald L. Llewellyrf'814-356-3295 [email protected] [email protected]

732/ ^ozUa^Jk. &f

Original: 2218 Q>Q£- *f QOG/

- j '7/<o/

/ f

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ggfessasi

^C< CÛ cUt^4^t4'J^ V*^lâH # ^ , vc^>^

*>& C%yK^J^ i^t^srwî #u~*Jh..

Original: 2218

-^^zî <*W tiU^^ sn<^ o0^^ -t&ôtsKuv^

O^~*(f ^ • . ^ - _ _ ^P^-ia.p/ ,,55,^ts-

Original: 2218

Kenneth Schoenberg14596 Paxton Run RoadShippensburg PA 17257

October 2, 2001

John R. McGinley, Jr. ChairpersonIndependent Regulatory Commission14th Floor Harristown 2; 333 Market St.Harrisburg, PA 17101

Dear Chairperson John McGinley,

I am writing to you in regards to the P.M.M.B. proposed regulation to pool 45%of the over order premium. Our family has a 125 cow dairy farm in FranklinCounty. The decision to pool the premium is absolutely correct. However, to befair and equitable to all PA. dairy farm families, 90% pooling is an absolute must.Why do half a job?

The over order premium was created to help dairy farmers period. Not to beinequitably distributed to a very small percentage, (12-15%) of Pennsylvaniadairy producers. We all have the same economic and weather related hardships.Our equipment, etc and etc, costs us the same. We don't pay less because wedon't get the premium. With 45% pooling I am still at an economic disadvantagein trying to compete with a Pa dairy producer receiving the premium.

Consumers fund the premium through a surcharge on each and every gallon offluid milk sold in Pennsylvania. I am grateful that consumers want to help Pa.Dairy Producers. I am quite sure they would be quite surprised to find out it is soinequitably distributed.

Please approve the pooling percentage at 90% rather than the proposed 45%.Do it right and then we can move on to other issues critical to thecommonwealth. It has already taken far too much time and energy.

Sincerely yours,

Kenneth Schoenberg

Original: 2218

October 1,2001

Beverly Miller, ChairpersonThe Pennsylvania Milk Marketing Board2301 North Cameron StreetHarrisburg, PA 17110


As I ponder the events in our country during the week of September 10, 2001, it just doesn'tseem fair, does it?

I'm a dairy farmer in Cumberland County, with my 2 sons, milking 130 cows and marketing ourproduct thru Land O' Lakes Cooperative, Though, I agree with the PMMB decision to pool theover-order premium - there is only one fair and equitable way to distribute the Over OrderPremiums and that is to have 90% pooling! that includes all Pennsylvania Dairy Farmers

Wasn't the Over Order Premium created to help all Dairy Farmers when laced with economicand weather problems? Unfortunately, while this premium is extremely beneficial to some it isunfairly distributed so that the majority of the proceeds go to a small minority of farmers. Myneighbor across the field produces the same amount of milk as our farm - quality of milk and theeconomic conditions are the same - yet he may receive several thousand dollars more than ourdairy farm! Is this what we call fair or equitable distributed?

Our consumers fund this premium with a 11.5tf surcharge on every gallon of fluid milk sold inPennsylvania. Whether the premium pooled is 45% or 90%, would not effect what the consumerpays for a gallon of milk. While 1 am thankful that the consumers want to help PennsylvaniaDairy Farmers produce quality products, I'm sure that they (consumers) would want anyassistance to be equitably distributed among all dairy farmers.

All dairy producers must have access to a fair price ibr their milk.

Please approve a regulation to pool 90% of the Pennsylvania Over-Order Premium to benefit altPennsylvania Dairy Farmers.

Sincerely yours,

vfr H J B UojdLTWeiuyd (I WLMS^ 555 Carlisle Rd.

Boyd L. Weary ff f U g N e ^ A mil*™ »c.c. The Honorable Raymond Bunt, Jr.

The Honorable Michael WaughJohn R McGinley, Jr. IRC ChairpersonSenator Hal Mo weryWilliam I Gabig, 199th Representative

Original: 2218

October 1,2001

Beverly Minor, ChairpersonThe Pennsylvania Milk Marketing Board ,._•.,.2301 North Cameron StreetHarrisburg, PA 17110


I am writing to you in regards to the Pennsylvania Milk Marketing Board's regulation topool 45% of the Pennsylvania Over Order Premium. I am a dairy farmer and milk 115cows in Bedford county. Although I agree with the PMMB's decision to pool theOver-Order Premium, I strongly feel that 90% pooling is the only fair way to create anequitable distributed premium system that benefits all Pennsylvania dairy farmers. This isan issue of fairness.

The Over-Order Premium was created to help dairy farmers when faced with economicand weather related hardships. I produce the same quality milk under the same economicconditions as my neighbor does. At 45% pooling my neighbor could still be getting asmuch as $3,500.00 more annually through the premium distribution process. This isn'tfair!

Consumers fund this premium on fluid milk sold in Pennsylvania. The level the premium ispooled would not affect the amount the consumer pays. While I am grateful that theseconsumers want to help Pennsylvania dairy farmers produce quality products, I am alsocertain that they would want any assistance to be equitably distributed among all farmers.

As dairy fanners we are an increasingly competitive industry, and we must have access toa fair price for our milk. That includes having the same access to premiums that ourneighbors do. Fm asking you to please approve a regulation to pool 90% of thePennsylvania Over-Order Premium to benefit all Pennsylvania dairy farmers.

Sincerely yours,

^ i U x ^ JA UhM<^<_Thomas W Wakefield

cc The Honorable Raymond Bunt, Jr.The Honorable Michael A. O'PakeThe Honorable Michael Waugh MB^9-The Honorable Peter J Daley U j H H f Thomas W. WakefieldJohnR. McGinleyJr. IRC Chairperson B B f e y 4 2 9 Sherry Rd.Representative Dick Hess ^ f S f * Bedford, PA 15522-4615Senator Robert Jubelirer

Original: 2218 ^ 0 ^ ^ K f « j L ^

October 1,2001 ( ^ V y » ^ v \ , # * • * * U ^ c.c. The Honorable Michael Waugh" The Honorable Raymond Bunt, Jr.

John R. McGinley, Jr., IRC ChairDear Chairperson Beverly Minor;

Although I commend the Pennsylvania Milk Marketing Board on its decision to pool the Over-OrderPremium, I support a regulation for 90% pooling. Pooling the premium is a regulatory issue and doesnot affect consumers at all. However, it does affect dairy producers.


r

If pooling is the right thing to do, then it shouldn't be half done. Please change the proposed "regulation so that 90% pooling of the premium is pooled among all dairy producers.

Sincerely yours,

c ^kf>^^>^ V/\c>lr \ (NAME)

Dairy Producer who milks \ 0 0 cows in l^JQ ^KKK^Y\ County, PA.

To who it may concern:

I support the 90% pooling . I feel very strongly that by what thePMMB board is doing( compensating some farmers and not others) is vastlydividing the farmers and causing division among its own. With the farm billsbeing voted on this should be a time where all fanners are united. Instead wehave farmers concerned about getting that extra money (WHICH ISADDING UP TO A SIZABLE AMOUNT BY NOW!) and concentrating onjumping ship of one co-op to board another . It causes confusion and hardfeelings. Simply put I presented my 10 year old with a math problem whichreplicates what the PMMB board is doing and ask my 10 year old to answerit accordingly. It is as follows:

There are two farms, farm a and farm b, that are side by side onthe same road. The weather is identical on both farms. When there is droughtthey both experience it. They both buy fuel from the same company. The fuelprices are high. There is a certain amount of money to be divided among thetwo farmers. You are to divide the money out according to the fanner thatexperienced a loss in income due to drought and high fuel prices. Whichfarmer would get the most? Farm A or farm B .

Answer from my 10 year old son: They would both get the same amountbecause they are farmers that experience the same losses.

It is amazing to me that a 10 year old can figure this out and 3 adults onPMMB don't get it. You are telling the public that you are giving this moneyto the farmers because they have experienced high fuel prices ^drought andlow milk prices.. The public thinks every farmer is getting this compensationwhich ironically is not true. Now that milk prices are up PMMB is stillbegging for more money to be distributed among those elite fluid producers.

IT TAKES EVERY DAIRY FARMER TO MAKE UP THEDAIRY INDUSTRY I DO NOT CARE IF YOUR MILKIS GOING TO CHEESE, ICECREAM OR FLUID. WEARE ALL INPORTANT AND NEED EACH OTHER. BYFAVORING ONE PART OF THE INDUSTRY YOU AREDIVIDING THE GROUP AGAINST ITSELF. A HOUSEDIVIDED WILL NOT STAND.

ssuo^ (t P

\

13123 Mongi.il RoadNewburg,PA 17240

October L 2001

Original: 2218

Beverly Minor, ChairpersonPA Milk Marketing Board2301 North Cameron StreetHarrisburg, PA 17110

Deai* Chairperson Minor:

Although I commend the Pennsylvania Mi Ik Marketing Board on its decision to pool theOver-Order Premium, I support a regulation for 90% pooling. Pooling the premium is aregulatory issue and does not affect consumers at all. However, it does affect dairyproducers.

Even at 45?4> pooling, one producer may be getting as much as $3,500 more from thepremium titan another. Both produce the same quality milk and have the same productioncosts. It is unfair that one producer should receive a greater benefit than the other does.90% is the only way to create a fair and equitably distributed premium system inPennsylvania.

If pooling is the right tiling to do, then it shouldn't be half done. Please change theproposed regulation so that 90% pooling of the premium is pooled among all dairyproducers.

I am a dairy producer who milks 225 cows in Franklin County, PA.

Sincerely yours,

Joseph Musser

cc. The Honorable Michael WaughThe Honorable Raymond Bunt, Jr.JolmR. McGinley, Jr., IRC ChairSenator Terry PuntRepresentative Allan EgolfRepresentative Jeffrey Coy

Original: 2218

October 1, 2001

Dear Chairperson Beverly Minor;

c.c. The Honorable Michael WaughThe Honorable Raymond Bunt, Jr.John R. McGinley, Jr., IRC Chair

Although I commend the Pennsylvania Milk Marketing Board on its decision to pool the Over-OrderPremium, I support a regulation for 90% pooling. Pooling the premium is a regulatory issue and doesnot affect consumers at all. However, it does affect dairy producers.


If pooling is the right thing to do, then it shouldn't be half done. Please change the proposedregulation so that 90% pooling of the premium is pooled among all dairy producers.

Sincerely yours,

*&£)* it'll (P- \\tfoLww&X/ (NAME)

Dairy Producer who milks [0 cows in frrfLKltli . County, PA.

COMMONWEALTH OF PENNSYLVANIA


CHIEF COUNSEL

October 2001

2301 NORTH CAMERON STREETHARRISBURG, PENNSYLVANIA 17110-9408

TELEPHONE (717) 787-4374FAX (717) 783-6492

Dear Pennsylvania Producer:

Thank you for your recent comments regarding the decision of the PennsylvaniaMilk Marketing Board to establish a marketwide pool of the mandated over-orderpremium. You expressed your support of 90% pooling rather than the 45% selected bythe Board. As you know, the pooling issue was heavily debated by both those for a pooland those against one. Currently the proposed pooling regulations are before theIndependent Regulatory Review Commission (IRRC) and the House and SenateAgriculture and Rural Affairs Committees for consideration and comments to the Board,Following their review, the Board will make any changes, if necessary, and submit theregulation in its final form to IRRC and the Committees. An agency has two years tosubmit the final form regulations. When the final form regulations are prepared, youmay receive a copy by providing a written request to the Board or access the final formregulations on the Board's website at http://www.sites.state.pa.us/PA Exec/Milk/.

Thank you again for your interest in a marketwide pool of the mandated over-order premium.

Very truly yours,

Through: /xynda J. Bowman Sharon L. GrottolaSecretary Chief Counsel

cc: Beverly R. Minor, ChairwomanLuke F. Brubaker, MemberBarbara Grumbine, Consumer Member

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Ernest GelsingerGel-Barre Farms482 Kircks Mill RoadRobesonia, PA 19551

Bob & Lois Jordan12640 Collinsville RoadBrogue, PA 17309

Ray Heckman11931 Orchard RoadMercersburg, PA 17236

Ralph & Crystal MoyerMor-Dale Farms91 Frystown RoadMyerstown, PA 17110

D. L. ZirkleZirkle Holstein Farm186 Conewago Creek RoadManchester, PA 17345

Norman Cook58 Hartzler LaneMill Creek, PA 17060

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Larry Bauscher138 Obyle RoadLenhartsville, PA 19534-9568

Daniel Brubacher70 Sutter RoadLenhartsville, PA 19534-9207

Calvin & Susan Miller170 Werner RoadFredericksburg, PA 17026

Mark & Linda DelbaughRR#l,Box52Liverpool, PA 17045

Lester Wingert1932 Mont Alto RoadChambersburg, PA 17201

Leon HooverNe-La-Le FarmRR 3, Box 158Selinsgrove, PA 17870

Luke RebuckBox 108Dornsife,PA 17823

Robert Kessler3650 Rt. 25Elizabethville, PA 17023

Donald Kline48 Klines RoadBloomsburg, PA 17815

Raymond Zimmerman660 Stricklerstown RoadNewmanstown, PA 17073

Harmon Hawbaker4134 St. Thorn-Will RoadChambersburg, PA 17201

George Myers1226 W. Trindle RoadMechanicsburg, PA 17055

Kenneth & Rhonda Reist104 Fox RoadLebanon, PA 17042

Arthur BoopRR1, Box 470Beaver Springs, PA 17812

R. Duane Seymour122 Spring Valley RoadMainesburg, PA 16932

Jonas Stoltzfus449 Maple Shade RoadKirkwood,PA 17536

Mervin Horst108 Kalbach RoadNewmanstown, PA 17073-9125

Walter & Velma MartinWal-VelFarm312 Stauffer roadNew Holland, PA 17557

Terry AllisonRRl,Box409DAlexandria, PA 16611

James &DebraKrantz83 Cardinal DriveQuarryville, PA 17566

R. Lynn KnepperKnepper Farms2651 Doran RoadThree Springs, PA

E. Lloyd DillingRR 1, Box 99AWilliamsburg,PA 16693

Herman BishopBishcroft FarmRR 1, Box 58Roaring Branch, PA 17765-9727

Marvin Meyer2894 Water Works WayAnnville,PA 17003

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Hershey Brothers Dairy1919 Locust Grove RoadManheim,PA 17545

Jean Shollenberger136 Calcium RoadFleetwood,PA 19522-8502

Glenn & Brenda BookBodendale Farms655 Strasburg PikeLancaster, PA 17602

Ronald Knauer22 Hickory LaneRobesonia, PA 19552

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Lamar FidlerFidler Farms2052 Panther Valley RoadPottsville, PA 17901-8772

Thomas Krall480 Schaeffer RoadLebanon, PA 17042

David Knauer39 Hickory LaneRobesonia, PA 19551

Terry & Diane Young265 Chapel Hill RoadSinking Spring, PA 19608-9280

Dan Esh1174 West Valley RoadLoganton,PA 17747

Reynolds ShearerR.E. Shearer & SonsRRl,Box482Port Royal, PA 17082-9729

Douglas & Deborah MyersMyers Family Dairy Inc.RR1, Box 14Shirleysburg, PA 17260

Oscar SuppleeRR 2, Box 181Thompsontown, PA 17094-9783

Amos & Sally Stoltzfus1033 Kirkwood PikeQuarryville, PA 17566

Daniel Beiler273 Hoover RoadElizabethville, PA 17023

Andrew Miller1728 Mount Joy RoadManheim,PA 17545

Dale & Kim GroffSwaying-Maple FarmRD1, Box 35-BDalmatia,PA 17017

Edward PepperRDl,Box217Canton, PA 17724

Ida Showaker170 Fish Hatchery RoadNewville,PA 17241-9473

Thomas & Dale SmithKing & Queen Farm1600 West Route 897Denver, PA 17517-9420

Samuel & Marian LongMilk-A-Long Farm1214 Furniss RoadPeach Bottom, PA 17563

Shady Birch Farms, Inc.1055 Stoney Hill RoadQuarryville, PA 17566

Paul & Alma Martin13924 Fort Loudan RoadMercersburg, PA 17236

Wayne & Loudenis Beidel8906 Mowersville RoadNewburg,PA 17240

Fred & Paul KeenerKeenr's Dairy20977 Goshorn RoadDry Run, PA 17220

Joe & Beth LaughlinRDl,Box220Lewistown, PA 17044

Lynn Kline1836 Kline RoadElverson,PA 19520-8602

Amy Stolzfus2613 Stumptown RoadBird in Hand, PA 17505-9779

Nathan Brubaker939 Fairview RoadManhiem,PA 17545

Benuel Esh115 Arcardia TracePeach Bottom, PA 17563

Adam Lied217 Sensenig RoadEphrata,PA 17522-9330

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Joseph MusserJo-Bri-Den Farms13123 Mongul RoadNewburg,PA 17110

Ernest Hostetter47 Crooked RoadAnnville,PA 17003-8519

Cloyd & Shirley RossR.D. #2, Box 84Martinsburg, PA 16662

David & Linda Bogart3340 Buck Hill RoadMuncy,PA 17556

Thomas Wakefield429 Sherry RoadBedford, PA 15522-4615

Kevin & Beth Myers2172 St. Thomas WilliamsonRoadSaint Thomas, PA 17252

Carl & Sylvia Bomgardner970 N. Rt. 934Annville,PA 17003

Steven Brubaker/847031SR49Westfield,PA 16950

Kenneth Schoenberg14596 Paxton Run RoadShippensburg, PA 17257

Carl & Gloria Reinford80 Covered Bridge RoadMiddleburg, PA 17842-9008

Henry & Dorothy AbmaProvidence AcresBox 453, R.D. 3Troy, PA 16947

Reuben MartinR.D. #2, Box 348Myerstown,PA 17067-2629

J.J. Wakefield317 Sherry RoadBedford, PA 15522

Gerald Martin600 Hackman RoadEphrata,PA 17522

Abner Glide601 Lime Quarry RoadGap, PA 17527

LaMar Lehman161 Manbeck RoadBernville,PA 19506

Dean Lesher24 Black Creek RoadAshland, PA 17921

H. Emile DillingR.D.#2,Box219Williamsburg, PA 16693

Ronald Dively1387 Ridge RoadNew Enterprise, PA 16664

John LehmanR.R.2,box4147Jonestown, PA 17038

Wallace Funk11659 Welsh Run RoadMercersburg, PA 17236

Ben & Barb Angle11351 Welsh Run RoadMercersburg, PA 17236

Daniel Hershberger4941 Brocker RoadChambersburg, PA 17201

M. R. Martin959 Reservoir RoadGreencastle, PA 17225

Alan WarburtonRR #1, Box 147-AWyalusing,PA 18853-9760

James SonnemaRR 2, box 601Gillett,PA 16925

Robert McSparran1802 Lancaster PikePeach Bottom, PA 17563-9512

Raymond & Lori MorningstarRR 1, Box 660Entriken,PA 16638

Linwood Mearkle208 Emerson Hollow RoadEverett, PA 15537

Dennis Clark7743 Chaneysville RoadClearville, PA 15535

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Woerner - Eiker Farm, Inc.1545 Blackhorse Tavern RoadGettysburg, PA 17325

Norman & Audrey Koehler5983 Kaylor RoadBanger, PA 18013

Axel Linde/Millie Widmann2170 Kirkwood PikeKirkwood,PA 17536

William Troutman1045 Black Road RoadCollegeville, PA 19426

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Stephen AumentG & S Aument Farm49 Shoemaker RoadQuarryville, PA 17566

Parke Ranck, Jre

230 Paradise LaneRonks,PA 17572

Warren ZimmermanRR 2, Box 106Mifflinburg, PA 17844

Glenn RohrerBlue Rock RoadLancaste,PA 17603

Gehringer MarthaPO Box 147Bally, PA 19503

Charles PotterLoshes Run RoadDuncannon,PA 17020

T. Kevin & Martha RisserRiss-Dale Farm2986 S.R. 49 EastCoudersport, PA 16915

Martha WintersLiberty LaneKirkwood, PA 17536

Carl GatesRR1Warriors Mark, PA 00016

Buxdell TroxellRR1Andreas, PA 18211

Ronald Hissong12352 Karper RoadMercersburg, PA 17236

John RisslerKings RoadEnterprise, PA 00016

Perry KretzingRR1Loysville,PA 17047

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September 28,2001

Original: 2218 r; ' / «

Sharon Grottola, Esq. L :. : 7:Chief Counsel 5 - 33 • "PA Milk Marketing Board ^ ^ r

110 Ag Building ?* o ( n ;2301N. Cameron St. g J f"Harrisburg, PA 17110

Dear Ms. Grottola:

As the President of Turkey Hill Dairy, I am writing to oppose the Milk MarketingBoard's proposed regulation to pool the state Class I over-order premium (7 PA Code ch. 148).

The operation of our Turkey Hill Dairy plant in Pennsylvania employs over 500associates. We are the sixth largest producer of ice cream nationally and also process milk. Ourchain of over 230 convenience stores employs over 4,000 people and is a retailer of milk, icecream, and other dairy products.

Turkey Hill Dairy believes the current handler pool payment method is best for thelimited number of dollars involved. The Pennsylvania premium has been as low as 25 or 30cents per hundredweight. To set up a complicated, bureaucratic system to pool the premiummakes no sense for several reasons:

1. The amount of premium paid to the farmer would be reduced and have less positiveeffect for Pennsylvania fanners.

2. If the premium is paid to a large national cooperative, there is no guarantee thepremium would go to Pennsylvania farmers.

3. If the premium is pooled, our plant would have more difficulty attracting raw milk.4. Class I milk supplies for consumers may not be sufficient to meet demand. Milk will

be pulled away from Pennsylvania.

Please feel free to call me directly at (717) 872-5461 to discuss pooling in more detail orfor additional information. Thank you for your consideration of this very important issue.

Sincerely,

Quintin F. FreyPresident

Turkey Hill Dairy • 2601 River Road • Conestoga, PA 17516-9630Phone: 717 872-5461 • Fax: 717 872-4130 • www.turkeyhill.com

POCONOiDAIRIES.

RO. BOX 1006 BLAKE3LEE, PA 18610

1-800-922-6455 • 570-643-9838 • FAX 570-643-9836

Original: 2218

September 28, 2001

Sharon Grottola, Esq.Chief CounselPA Milk Marketing Board110 Agriculture Building2301 North Cameron StreetHarrisburg, PA 17110

Dear Ms. Grottola:

This letter is in opposition to the proposed regulations to pool the over-order premium.

We are a small dairy cooperative (14 members) located in Northeast Pennsylvania. Inaddition to our fourteen members, we have 32 full-time employees at our distributionfacility in Blakeslee, Pennslyvania which operates under the trade name, PoconoMountain Dairies. Also, we have nine full-time employees at our Bloomsburg facilitythat operates as Breisch's Dairy, Inc.

We have been in business since 1940 and have operated under the rules and regulationsof the PMMB since then. Certainly we understand that rules change over time andbusinesses must conform to those changes. What we can not understand, however, ishow regulations can even be considered that will reduce the income of so manyindependent dairy farmers.

Some points to consider:

1. Pooling of the over-order premium will not add one dime to the total amountpaid to dairy farmers. It is simply a redistribution of premium dollars.

2. Pooling of the over-order premium will reduce the income of farmers inPennsylvania that ship to Class I plants in Pennsylvania. The amount takenfrom those farmers will be spread to all Pennsylvania farmers that ship to allPennsylvania Plants (Class I, II & III).

3. A large national coop like Land-o-Lakes that operate in many states will likelyspread their share of the premium over the entire membership thus having thepremium dollars that were intended to help and support Pennsylvania DairyFarmers moving out of state.

4. Some large cooperatives (i.e. Land-o-Lakes) have already demonstrated thatthey are willing and able to circumvent the intent of regulations by qualifyingmilk in various Federal Order Pools to their advantage. This is certainly notillegal; however, it certainly makes one wonder what they would do tomanipulate a statewide pool.

5. An over-order premium has been in affect for over thirteen years. WhenLand-o-Lakes was the supplier to a large number of Class I plants they weremute on the issue. In the last few years they have lost a large portion of thatbusiness. All of a sudden, they say the premium is unfair and should bepooled. If this happens, Independent Farmers that have done an excellent jobby producing quality milk suitable for Class I markets, will be penalized fordoing a good job. Does that make any sense?

6. There will be additional expense for the collection, disbursement and theauditing of the pooled funds. Who will pay for this? Most likely the DairyFarmers, which will mean even less to distribute.

7. The percentage of the premium to be distributed has no basis in soundeconomic study or in law. It is arbitrary, apparently in an attempt to come tosome kind of compromise. This fact alone can make pooling of the premiumopen to protracted legal challenges.

8. The premium as it exists today is an add-on to the Class I price. Therefore,the consumer of fluid milk pays for 100% of this additional premium. If thepremium is then pooled, the fluid milk consumer is then subsidizing theproducer that ships to a butter, powder, ice cream or cheese plant. Whyshouldn't the consumers of these products subsidize those producers? Doesthis open the PMMB up to a lawsuit by a Class I consumer group?

9. The milk marketing law allows a cooperative to "reblend" payments receivedfrom the various milk plants that they supply. Therefore, if a cooperativesupplies Class I and Class II plants, for example, they can then pay theirmembership one, reblended price so that all members are paid the same.Therefore, if their goal is to increase that reblended price that they pay theirmembership, they should attempt to supply as many Class I markets aspossible. By doing so they will be eligible to receive a larger share of the overorder premium. That is called sales and marketing. It appears, however, thatthe large coops would rather legislate higher prices for themselves at theexpense of many independents instead of working to expand their Class Imarkets.

Again, on behalf of Monroe County Milk Producers Cooperative Association, let meexpress our opposition to pooling the over-order premium in any form. It isdisappointing that the large cooperatives are attempting to take from Peter to pay Paulinstead of working to improve conditions for al] dairy farmers.

Sincerely,

lichael A. KaneGeneral Manager

Original: 2218

Maryland & VirginiaMilk Producers Cooperative Association, Inc

September 27, 2001

Independent Regulatory Commission f FSubject: PMMB Pooling Regulation :

14th Floor, 33 Market Street ;Harrisburg, PA 17101

Dear Commission Members:

Maryland & Virginia is a farmer-owned cooperative with 515 dairy farmer members inPennsylvania. These members produce 842,121,990 pounds of milk per year. These dairyfarmers have elected to be a cooperative member so they can have a collective voice in affairsthat effect their business. One of those affairs is the regulation to pool over-order premiumsadopted by the Pennsylvania Milk Marketing Board.

We commend the PMMB for the decision to pool. However, we believe that the 45%pooling level falls far short the fairness level needed to be equitable between all Pennsylvaniadairy farmers.

Cooperative members provide much of the balancing service for the market. Our plantsprovide a market for milk that is not needed for Class I in the winter and spring. The volume inour plants decreases significantly in order to provide milk for Class I use in the summer and fallThis balancing function has an expense, and in Federal Order markets the cost of this expense isshared among producers through pooling. 45% pooling is a step in the right direction, but it doesnot go far enough. We believe that the only way to fairly share regulated premiums to allPennsylvania dairy farmers is with 90% pooling.

Class I processors with high Class I utilizations use regulated premiums to achieve acompetitive advantage against the coops in procuring milk producers. Regulated premiumswould be more fairly shared if these dollars were shared by all dairy farmers, not to only thosefarmers supplying certain plants.

We strongly urge you to change the regulation to reflect a 90% pooling level. 100%pooling in the Federal Orders is widely accepted and it would equitably spread the income andcost of serving the market to all producers involved. Thank you for your time and for a positiveconsideration for the needs of all Pennsylvania dairy farmers.

Sincerely,

Q/UvAy\Robert L. ShoreSecretary/Treasurer and General Manager

Headquarters and Marketing Division: 1985 Isaac Newton Square West • Reston, Virginia 20190-5094Serving Pennsylvania, Maryland, Delaware, Virginia, West Virginia, Tennessee, North Carolina, South Carolina, Georgia, and Alabama

phone703.742.6800 /«c703.742.7459 web www.mdvamilk.com

Wengert s I R Y PHONE: 717-273-2658FAX: 717-273-2794

Original: 2218

September 27, 2001

C *"""* °Sharon L. Grottola, Esq. g ^ §^ jrChief Counsel 2? 1 * H .^PA Milk Marketing Board fj~ ~ — £110 Ag Building rc • ; : i £•2301 North Cameron Street ^ 3 m .'•- <'Harrisburg, PA 17110 ° o ^ I- p? g ^ - ~Dear Representative Bunt, 3> o

o cn PI have tried to remain centered and passive about the issue of market wide

pooling of the PMMB over order premium, however, I feel an obligation to defendindependent milk producers in Pennsylvania.

First, I would like to express gratitude to the Milk Marketing Board andPennsylvania lawmakers for their support of independent dairy producers in our greatCommonwealth. The current milk marketing board regulations and structure have helpedto generate extra revenue for the Pennsylvania dairy industry and the independent milkproducers who are responsible for providing, "a sufficient quantity of pure andwholesome milk to the inhabitants of this Commonwealth."

As a field representative who works directly with independent dairy farmers inPennsylvania, I recognize the extra effort dairymen are willing to make to fulfill thiscommon goal. Those efforts are currently being rewarded with a competitive farm gateprice that is partially due to the PMMB over order premium structure. Many producersalso earn a monetary quality premium which helps to cover the cost of the extra stepsthey take to produce high quality milk.

Please recognize that the PMMB over order premium is not being used as aquality incentive. Most of Pennsylvania's handlers have separate quality incentiveprograms to reward producers for shipping high quality milk.

As today's dairy industry progresses, many dairy producers are recognizing theneed to operate their farm as a business, and realize that marketing is a key to anyenterprise. They are noticing that the number of marketing options is becoming limited.They are growing in size to be able to assemble a load of milk directly on their farm tomarket through cooperatives to a deficit Southeast United States milk market for a"volume premium/ They are diversifying to do cash cropping, custom field work, custom

heifer raising, registered cow/bull marketing, or relying on independent milk handlers tobuy milk directly off their farm and pay a reasonable Class I over order premium to putmore money into their farm milk checks. Class I handlers have little opportunity togenerate extra revenue beyond the PMMB Class I over order premium levels. Marketwide pooling will make independent milk handlers farm gate pay price less competitiveand may potentially limit producers1 options of where to sell their milk.

With my milk marketing background beginning at Maryland and Virginia MilkProducers Cooperative Association, Inc., I have seen first hand that a well managedcooperative led by intelligent directors and driven management can generate additionalrevenues for its member/owner dairy producers. By capitalizing on opportunities toefficiently move milk down the East Coast to the milk deficit Southeast market, they areable to capture money from the Federal order V pool in addition to other premiums.Cooperatives can market milk to processors who pay premiums, (often over and abovethe PMMB Class I over order premium level), that can be recovered through value-added dairy product sales. Many cooperatives even operate processing plants that makeand sell value added dairy products that generate profit for the cooperatives. Theseprofits should translate to more money for their member/owner dairy producers in theform of cash and equity ownership in the cooperative. A well managed cooperative canusually return more than 20% of its profit, (which is required under the Capper VolsteadAct), to its members. These returns can equal 75 cents per hundred weight or more inthe form of cash and equity combined. This is a "premium" over and above milk marketpricing. Additionally, cooperatives often pay different farm gate prices to their membersbased on volume, quality, location to processing facilities, etc. With these inequitiesalready existent within cooperatives, I am troubled to understand their push for theestablishment of a pool of the PMMB Class I over order premium monies. Why docooperatives expect the PMMB and Pennsylvania lawmakers to establish regulationsthat "evenly re-distributeM premium money when they don't evenly distribute thepremiums that they receive from milk sales among their own member/owners?Additionally, would it be fair to ask the PMMB and Pennsylvania lawmakers to considerregulations that "evenly re-distribute" profits that cooperatives generate amongPennsylvania's independent handler producers? These cooperatives are asking PAClass I handlers to supplement their existing over order premiums at the expense of PAindependent milk handler producers.

On behalf of Pennsylvania independent handler milk producers I ask that thePMMB and Pennsylvania lawmakers consider these points as they move toward theirdecision on whether or not to establish a pool for Pennsylvania's much valued Class Iover order premium.

/sUry^ ^VJ^S

Troye CooperField Representative for Wengert's Dairy

Maryland & VirginiaMilk Producers Cooperative Association, Inc.

September 27, 2001Original: 2218

Beverly Minor, ChairpersonPA Milk Marketing Board2301 North Cameron StreetHarrisburg, Pa 17110

Dear Ms. Minor:

Maryland & Virginia is a farmer-owned cooperative with 515 dairy farmer members inPennsylvania. These members produce 842,121,990 pounds of milk per year. These dairyfarmers have elected to be a cooperative member so they can have a collective voice in affairsthat effect their business. One of those affairs is the regulation to pool over-order premiumsadopted by the Pennsylvania Milk Marketing Board.

We commend the PMMB for the decision to pool However, we believe that the 45%pooling level falls far short the fairness level needed to be equitable between all Pennsylvaniadairy farmers.

Cooperative members provide much of the balancing service for the market. Our plantsprovide a market for milk that is not needed for Class I in the winter and spring. The volume inour plants decreases significantly in order to provide milk for Class I use in the summer and fell.This balancing function has an expense, and in Federal Order markets the cost of this expense isshared among producers through pooling. 45% pooling is a step in the right direction, but it doesnot go far enough. We believe that the only way to fairly share regulated premiums to allPennsylvania dairy farmers is with 90% pooling.

Class I processors with high Class I utilizations use regulated premiums to achieve acompetitive advantage against the coops in procuring milk producers. Regulated premiumswould be more foirly shared if these dollars were shared by all dairy farmers, not to only thosefarmers supplying certain plants.

We strongly urge you to change the regulation to reflect a 90% pooling level. 100%pooling in the Federal Orders is widely accepted and it would equitably spread the income andcost of serving the market to all producers involved. Thank you for your time and for a positiveconsideration for the needs of all Pennsylvania dairy farmers.

Sincerely,

Robert L. ShoreSecretary/Treasurer and General Manager

Headquarters and Marketing Division: 1985 Isaac Newton Square West • Res^'^"^llrgia. and AlabamaServing Pennsylvania, Maryland, Delaware, Virginia, West Virginia, Tennessee, North Carolina, South aw

phone703.742.6S00 /«*703.742.7459 wtfwww.mdvamilk.coin

jchneider1/atiey 0?antH& &<z&Uf>

chneider

1860 East Third StreetWilliamsport, PA 17701-3992

Original: 2218

Phone: (570) 326-2021Fax: (570) 326-2738

September 27,2001(.; •

>• or -5

Sharon L. Grottola, Esq.Chief CounselPA Milk Marketing Board110 Agriculture Building2301 N. Cameron StreetHarrisburg, PA 17110

Dear Esquire Grottola:

I am writing this letter to show real concern over a proposal by the Pennsylvania Milk MarketingBoard to regulate the pooling of the Class I over-order premium. The Milk Marketing Board is proposingto pool 45% of the Class I over-order premium.

We have heard that there has been a recommendation by the Farm Bureau and Land O' Lakes toincrease the percentage pooled to 90%. By doing this you would hurt the independent farmers that choosenot to join a co-operative. It would also hurt co-operatives like DMS - DFA - and Dairylea that have a lotof Class I utilization.

Land O' Lakes co-operative is paying big premiums of three to four dollars and sending that milkfrom Pennsylvania to South East states such as North and South Carolina. These premiums are not sharedby the rest of the farmers in Pennsylvania.

We, at Schneider-Valley Farms, believe if the pooling of the over-order premium is allowed it willhave an effect on the price of milk. Milk would automatically go up because the Class I farmers will needmore money to produce the same milk. It would eliminate formers because they could no longer becompetitive by sharing the over-order premium.

Schneider-Valley Farms strongly opposes pooling.

We hope you take a real hard look at this situation and vote against over-order pooling.

If you have any questions or comments, please do not hesitate to contact me. I thank you fortaking the time to read this communication.

Robert K.General Manager

I Mertz { j[anager .^*s

WHOLLY OWNED SUBSIDIARY OF SCHNEIDER'S DAIRY,JNC.. PITTSBURGH. PA 15227AN EQUAL OPPORTUNITY EMPLOYER

1506 Mars-Evans City Rd. _ (724) 538-4752Evans City, PA 16033 FAX (^4) 538-3250

Original: 2218 = "™ S •'•"September 26,2001 ^ • ""* ^ S

Sharon Grottola, Esq. j : - <Chief Counsel ^ ^ 3 - 3PA Milk Marketing Board ^ uv _ ~110 Ag Building >• § ^ 2 "2301 N. Cameron Street 5 .= >Harrlsburg, PA 17110 °

Dear Ms. Grottola:

Marburger Farm Dairy, Inc. is a family owned corporation located in Evans City, in ButlerCounty, PA. We have our own processing plant and a full service dairy operation, deliveringmilk and dairy products to Supermarkets, Convenience stores. Schools, Hospitals, NursingHomes and also Home Delivery. We employ approximately 100 people.

Our milk supply comes from our own farm with a herd of approximately 150 cows and wepurchase milk from approximately 70 independent dairy farms located in WesternPennsylvania.

The over-order premium of $1.35 per hundred weight now in effect is paid by Marburger FarmDairy to the farmers that produce milk for us. We oppose the state wide pooling of any percent of this premium. Our farmers produce quality milk that must meet all Federal InterstateMilk Shippers Inspections, all Federal Drug Administration Inspections, all PennsylvaniaDepartment of Agriculture Inspections and quality bacterial testing. The over-order premiumnow in effect is to help our farmers maintain these high standards and should not be sharedby other farmers. Our farmers receive the over-order premium on the Class I sales of thedairy that purchases their milk. This premium should not be pooled unless all premiums on allmilk produced in Pennsylvania is pooled with all dairy farms. Also, under Federal Order No.33, some Wisconsin milk is pooled in Federal Order No. 33, which we call "paper pooling11 andhas been costing our farmers $.60 to $.70 cents per hundred weight out of their monthlycheck.

Land O1 Lakes and others are selling milk, produced by Pennsylvania farmers, inSoutheastern United States with a premium of $3.00 to $4.00 per hundred weight and none ofthese premiums are shared with our farmers.

Sincerely.

A. Martin Marburger UMarburger Farm Dairy, Inc.

Full Line Quality Dairy Products • Fresh From The Farm

Original : 2218

Dean Foods Company's Comments RegardingThe Milk Marketing Board's Revised Pooling Regulations

On behalf of Dean Foods Company's five fluid milk processing plants located across the

Commonwealth of Pennsylvania, the following comments are being filed this 23rd day of

September 2002. These comments are intended to answer the Pennsylvania Milk Marketing

Board's September 6, 2002 request for comments regarding the technical aspects of

implementation and administration of the revised proposed pooling regulations. Dean Foods

takes seriously this opportunity to comment because we recognize and appreciate that the Board

has demonstrated a willingness to address some of Dean's technical concerns expressed in past

comments filed approximately one-year ago.

Please note, however, that Dean Foods remains adamantly opposed to the Pennsylvania

Milk Marketing Board's decision to pool the Pennsylvania Mandated Over-Order Premium.

Dean Foods continues to believe that it is neither equitable nor consistent with the Board's

mandate under section 801 of the Pennsylvania Milk Marketing Law to take away money that is

paid exclusively by Class J processors for milk procurement and give that money to non-Class 1

processors to subsidize their milk procurement efforts. Thus, these comments are offered merely

as an attempt to make pooling workable from the Class I processor's perspective if pooling

should be finally adopted and upheld as lawful. Due to the complexity of these regulations,

many of our comments will be presented in bullet form. However, there are a few overarching

concerns that can be expressed at the outset.

First, these regulations are difficult to understand and we suggest will be subject to

interpretation and debate because they do not provide sufficient definitions. The regulations use

numerous words that are "terms of art" which could be interpreted differently depending on who

is doing the interpreting. This makes it terribly difficult for Dean Foods to adequately comment

on the technical aspects of the regulations. Indeed, because these regulations are so lacking in

DC #129011 vl

definitions, we would appreciate the opportunity to comment on a second round of revisions

once the Board has the opportunity to bolster the definitions section. The specific words with

which Dean Foods has difficulty are discussed below in bullet format.

Second, these regulations appear to go beyond the Board's stated intention to "expand the

distribution of the over-order premium." Pennsylvania Milk Marketing Board, Press Release

(Dec. 13, 2002) available at www.mmb.state.pa.us/mmb/lib/mmb/Other/poolingdecision.pdf

While we genuinely believe this is unintentional, we are obliged to point out our concerns. In

the proposed pooling regulations the over-order premium appears to be defined in a way that

could increase the volume of milk on which processors are liable to pay the Over-Order

Premium by imposing a charge on, among other things, milk involved in interstate commerce.

To Dean's knowledge, the Board did not notify interested parties of such an intention to expand

the scope of the Over-Order Premium obligation.

The new regulations appear to reach milk involved in interstate commerce in the

following ways: By stating that Pennsylvania Production includes "milk produced by

Pennsylvania producers and sold to Pennsylvania Pool Plants, regardless of the location of the

plant of physical receipt" this definition suggests that processors may be required to pay the

Over-Order Premium on milk that is diverted out-of-state. Additionally, by stating Pennsylvania

Production is milk produced by Pennsylvania producers and physically processed by

Pennsylvania Pool Plants, this definition suggests that processors may be required to pay the

Over-Order Premium on milk that is sold to retailers or distributors outside of the

Commonwealth of Pennsylvania. Both outcomes are unprecedented. See e.g., Discussion herein

regarding "Pennsylvania Production,"

With respect to the milk volumes involved in interstate commerce, such a result we

believe, would create a direct burden on interstate commerce that would violate the proscriptions

2 DC #129011 vl

of the negative Commerce Clause of the United States Constitution. Baldwin v. G.A.F. Seelig,

Inc., 294 U.S. 511 (1935). Moreover, such a result would impose an additional unanticipated

burden on dealer and subdealer or dealer and retailer relationships involving out-of-state

transactions. For instance, Dean Foods is party to contracts with out-of-state entities where the

contracts are premised on the fact that the Over-Order Premium does not apply to milk sold to

these out-of-state entities. Under the proposed regulations, it appears that the Over-Order

Premium would be charged against this milk. If this were to occur, Dean's contracts would be so

altered (affecting Dean's profit or Dean's ability to compete with out-of-state plants), that our

Pennsylvania plants might lose or need to give up such accounts.

Third, while Dean believes it was not the Board's intention, the regulations are written in

a way that it is not clear whether the historical limitations on and exemptions from having to pay

the Over-Order Premium remain in place. Due to a lack of clarity with respect to, among others,

the definitions for Class I utilization, Producer Milk, Pennsylvania Class I Pounds, Pennsylvania

Production, it is not clear that provisions have been structured to insulate Transfers, Purchased

From Other Dealers Packaged Milk or Shrink, among other things, from double counting or the

reach of the Over-Order Premium charge. Moreover, although Dean understands and supports

what appears to be an effort by the Board to disqualify from pool allotments (distributions from

the Pennsylvania pool) the milk of manufacturing plants that ride the Federal Order pool during

times of advantageous price relationships and which choose not to participate in the Federal

Order pool during times of disadvantageous price relationships, Dean is concerned that the

definition for "Qualified Pounds" as it relates to "Federally Depooled Milk" is imprecise and

may go beyond this ostensible and laudable purpose. This may inadvertently disqualify milk,

including Class I milk, that achieves non-pool status under the Federal order by virtue of being

transferred or shipped to a partially regulated federal order plant located inside of Pennsylvania.

3 DC #129011 vl

Fourth, it appears that under these proposed regulations, a Class I processor could find

itself paying into the pool on milk that will not be eligible for pool distributions (the allotment).

This concern stems in large part from a conclusion that the definitions of "Pennsylvania

Production" and "Qualified Pounds" may not be parallel. An attempt at a fuller analysis of this

admittedly complicated issue is articulated below in the bullets relating to "Pennsylvania

Production," "Qualified Pounds," § 148.3, and § 148.5. At the core of this analysis is the

determination that the Board's own example suggests that these revised proposed pooling

regulations have expanded the scope of the Over-Order Premium obligation. If this analysis is

correct, Dean respectfully objects to such inequitable treatment. Dean asks the Board to ensure

that milk that is subject to the Over-Order Premium charge also be eligible for distributions from

the pool (Pool allotments).

Finally, Dean notes that the Board has made special provisions for Producer-Dealers and

Dean would ask the Board to consider whether similar provisions should be made for tolling

arrangements/service contracts presently in place.1 It may be appropriate to affirmatively state

that nothing in these regulations is intended to alter the service contracts that have been

previously approved by the Board. In support of this concept, Dean reminds the Board that as

part of the approval process, these service contracts have been deemed necessary and appropriate

for the Pennsylvania dairy industry. If pooling is permitted to alter these arrangements, then

there is reason to believe that their intended purpose would be undermined.

A. Section 148.1 Definitions

• Diversions

In order to be consistent with federal milk order terminology, the term "enter(s)" shouldbe replaced by the term "received."

1 Specifically, Dean believes it is important to preserve the integrity of the service contracts/tolling agreements thatwhile private between the parties and not subject to public disclosure have been previously Grandfathered by theBoard.

DC #129011 vl

• Over Order Premium Value.

It appears that this definition would impose an over order premium charge on a largervolume of milk, including milk in interstate commerce, than the existing Over Order Premiumstructure presently reaches. Under the present regulation, the Over Order Premium applies tomilk that is "produced, processed, and sold in the Commonwealth." Official General Order No.A-894 (Supplemental) (Jul. 15, 1997), incorporated by reference in subsequent Over-OrderPremium Decisions; see also Pennsylvania Milk Marketing Board, Industry Terms defining theOver-Order Premium. Under the proposed regulations, no such limitation is expressly stated.

Indeed, the statement that the Over-Order Premium charge will apply to "all milk"produced in the state and included in the Class I utilization of Pennsylvania Pool Plants suggeststhe contrary. In part, this may be due to the fact that "Pennsylvania Class I utilization ofPennsylvania Pool Plants" is undefined. However, even with a much needed clarification ofPennsylvania Class I utilization of Pennsylvania Pool Plants", Dean respectfully suggests that anexpress statement akin to that which has been made in Order No. A-894 (Supplemental) shouldbe included.

With respect to the undefined phrase "Pennsylvania Class I utilization of PennsylvaniaPool Plants," Dean believes that the Board should clearly identify milk that is produced,processed and sold in Pennsylvania, consistent with Official General Order 894 (Supplemental).Dean also recommends the clarification of other limitations on the scope of "Pennsylvania ClassI Utilization." Among other limitations, it should be made clear that "Pennsylvania Class Iutilization of Pennsylvania Pool Plants" is net of shrink and purchased from other dealerspackaged product,

• Over-Order Premium Rate.

Although this definition seems to capture the concept that the Over-Order premiumshould only apply to milk that is produced, processed and utilized in Pennsylvania, Dean is notconfident that the lack of clarity in other key definitions that are used to calculate the volume ofmilk subject to the charge will not undermine this limitation and confuse required calculations.Indeed, the Boards own calculations, as discussed below regarding section 148.5, indicate thatthe Over-Order Premium seems to have been expanded.

• Pennsylvania Class I Pounds

This term is also unclear because it is defined using terms that are themselves undefined.For instance, the term "Pennsylvania Milk" does not appear to be defined anywhere in theseregulations. Without clarification, "Pennsylvania Class I Pounds" might be interpreted tocapture milk that is diverted out-of-state. In addition, without clarification, "Pennsylvania ClassI Pounds" might be interpreted to capture milk that is sold in an out-of-state transaction to out-of-state distributors or retailers. To Dean's knowledge, such divergence from existing standards fordetermining a plant's Over-Order Premium obligation has not been part of the official discussionand consideration by the Board. Moreover, there is a significant risk that such a result may bechallenged as an unlawful extension of Pennsylvania regulation into interstate commerce.

DC #129011 vl

Moreover, this definition should expressly state what "adjusted for purchases from otherdealers" means. For example, does it mean that Pennsylvania Class 1 Pounds do not includetransfer milk and packaged milk purchases. Dean respectfully suggests that this adjustmentshould clearly provide for the subtraction of these purchases in order to avoid double counting.Dean also believes that such adjustments should be carried through the definitions that are usedto calculate the Over-Order Premium obligation.

• Pennsylvania Producer

This definition should be modified to apply to the production of Grade A milk. To theextent the Board has sought to limit the participation of manufacturing plants and their producermilk when they choose to enter and leave the Federal Order pool based on price relationships,producers of Grade B milk should not be eligible for Pennsylvania Pool distributions becauseGrade B producers may not participate in Federal Order pools and cannot provide any service tothe Class I market.

• Pennsylvania Production

This definition, which is used to calculate a processor's Over-Order Premiumobligation whether inadvertently or otherwise seems to expand the breadth of the Over OrderPremium Obligation in two untenable ways. By stating that Pennsylvania Production includes"milk produced by Pennsylvania producers and sold to Pennsylvania Pool Plants, regardless ofthe location of the plant of physical receipt, this definition suggests that processors may berequired to pay the Over-Order Premium on milk that is diverted out-of-state. Additionally, bystating Pennsylvania Production is milk produced by Pennsylvania producers and physicallyprocessed by Pennsylvania Pool Plants, this definition suggests that processors may be requiredto pay the Over-Order Premium on milk that is sold to retailers or distributors outside of theCommonwealth of Pennsylvania. Both outcomes are unprecedented. Moreover, advance noticeof such a result was not provided to the interested parties. Finally, this presents an interstatecommerce concern. Because this definition is used to determine the Over-Order Premiumobligation for Class I processors, it appears that this definition would unlawfully extend theOver-Order Premium into interstate commerce.

It is also critical to note that this definition does not appear to be correlated with the"Qualified Pounds" definition, and appears to bring about inequity in the system. The Board haslong represented that processors paying 45% of the Over-Order Premium into the pool will getits fair share back out of the pool since all (presumably Pennsylvania produced, processed andsold) milk will be eligible for distributions from the Pennsylvania Milk Pool so that the loss ofrevenue for Class I producers would be something less than 45%. Perhaps inadvertently, theBoard has created a different situation that we believe is inconsistent with prior statements, andwould be inequitable. Specifically, a comparison of the definitions of "PennsylvaniaProduction", which appears broad, especially in the context of the examples, and "QualifiedPounds", which appears to be more narrowly defined, especially in light of the examples,Pennsylvania Pool plants are forced to pay the Over-Order Premium on a larger volume of milkthan the volume of milk that is eligible to receive a pool distribution. See Discussion in Part Dfor a more detailed explanation.

DC #129011 vi

While the regulations expressly exclude from eligibility for a pool distribution, milkin interstate commerce and/or federally depooled milk (a term that also needs clarification), theregulations appear to impose the Over-Order Premium charge on such milk. If the milk is notentitled to participate in pooling it should not be subject to a pool charge.

• Qualified Pounds

The term "Pool Plant" is undefined unless modified by the term "Pennsylvania." Whileminor and probably meant to refer to "Pennsylvania Pool Plant," we think this is importantbecause there may be a risk that milk that is going to an out-of-state pool plant within themeaning of the federal orders could be construed as somehow being eligible to share in the Over-Order Premium. We also think the term "non-pool plant" should be defined. We think, butcannot be sure that it means a plant that either (a) is not in Pennsylvania, or (b) is inPennsylvania but receives all of its milk from out-of-state.

In addition, we think that the phrase "non-Class I milk depooled from a federal milkmarketing order" should be defined so that is not construed more broadly than was intended. Itis unclear, though we infer that this provision seeks to limit eligibility for sharing in thePennsylvania Over Order Premium to the milk of manufacturing plants that regularly pool theirmilk on a Federal order and stand ready to service the Class I market However, Dean isconcerned that this provision may inadvertently disqualify for pool allotments milk that isdelivered to Federal Order plants that are not fully regulated under a Federal Order. If this werethe case, this would be especially problematic because it appears that the Over-Order Premiumwould nonetheless be charged on such milk.

• Qualified Producer

This definition is unclear and appears to be a description of producer milk rather thanproducers. While this may not be the intended meaning, it is also confusing because it suggeststhat if a Pennsylvania producer's milk is diverted to an out-of-state distributing plant, then thatPennsylvania producer is not a qualified producer. If the Board means to say that the portion ofthe producer's milk so diverted is not qualified, the definition should clarify that that portion ofthe producer's milk is not qualified. This definition is also problematic in that any and all milkthat is diverted out-of-state, regardless of whether it is diverted to an out-of-state distributingplant or cheese plant, should not be able to receive pool dollars (as indicated above, nor should itbe the subject of Over Order premium charges). Accordingly, Dean is concerned that thisdefinition leaves open the possibility that diversions to out-of-state manufacturing plants wouldbe eligible for allotments out of the Pennsylvania pool.

B. Reporting Requirements (§ 148.2)

Dean appreciates that the Board adjusted the reporting dates as requested in pastcomments. Moreover, Dean appreciates the opportunity to provide additional commentary,however, Dean believes it is still problematic that the forms required to satisfy these reportingrequirements are not available for comment. We genuinely believe that we cannot adequatelycomment on the reporting requirements or these regulations in the absence of the required forms.

DC #129011 vl

In addition, Dean believes that the Board should make provision for a good causeexception in subpart (b) for failure to file by the 14th. In the event that there is a good reason,such as natural disaster, death, or other major event, we think the Board should be able to makeexceptions for a late filing deadline. Indeed, it is the flexibility of the Board that has made it sosuccessful. Treating all milk as produced outside of Pennsylvania is such a significant penaltythat some exceptions might be appropriate.

C. Calculation of the Contributing Pool Plant Over-Order Premium Level (§ 148.3)

Dean finds it difficult to adequately comment on this provision and the example usedthereunder in the absence of the forms that will be the basis of the calculation. Without seeingthe forms, it is difficult to ascertain the calculation of the variables that have been identifiedhereunder Many of the concerns and questions that have been raised in these comments maywell be resolved once the forms are made available so that Dean can test the examples using reallife numbers.

In addition, with respect to 148.3(a), "Pennsylvania Production" seems to have beendefined more broadly than had been anticipated. See discussion in the definitions section above.To the extent it is used to calculate the over order premium obligation of Pool Plants, it appearsto create a direct burden on interstate commerce. Moreover, Dean is concerned that section148.3(a), uses the term "total producer purchases" without first defining it. The term "totalproducer purchases" includes Class I diversions by other plants, which suggests that doublecounting may be taking place.

Further, whether inadvertently or otherwise, Dean sees a potential inconsistency in thecalculation of the numerator and the denominator in the section 148.3 example. It appears thatthe numerator may be over-inclusive for the reasons explained in the discussion of"Pennsylvania Production." It is in light of this, that we express concern that the denominatormay be under-inclusive, thus resulting in a higher than appropriate calculation of "Percentage ofPennsylvania Purchases." Dean recognizes that there may be an explanation that is founded inOfficial General Order No. A-893, but is unable to ascertain it at this time. In light of pooling,however, Dean respectfully sets forth the query that if non-Class I diversions are subtracted outof the denominator on the basis that they are not part of the plant volume, then should they not besubtracted out of the numerator on that basis as well.

In section 148.3(b), the "Percentage of Pennsylvania Purchases" should probably beclarified. It defined by example, in large part, instead of by words. Plant accounting is complexand difficult. Without knowing all details of a plant, it is extremely difficult to know thedefinition of the "Percentage of Pennsylvania Purchases" using an example only. Moreover,because of criticism of subpart (a), subpart (b) seems to have created a broader Over-Orderobligation than exists under the present system.

Additionally, section 148.3(b) does not define Class I utilization. As discussed above, itwould be helpful to have clarification of whether or how packaged milk receipts or shrink aresubtracted out of the "Class I utilization." Without a clear definition, we cannot adequatelycomment on whether this formula would be overbroad in other unforeseen ways.

DC #129011 vl

D. Collection and Distribution of the Pool (§ 148.5)

Regarding § 148.5(a) (the Pool Allotment For Each Plant), there seems to be a disconnectbetween the pounds of milk that a pool plant is required to pay into the pool on, and the poundsof milk that a pool plant may collect from the pool on.

For example, Dairy A calculates its Pennsylvania Percentage and thus its payment intothe pool based on 300,000 pounds of Pennsylvania Production. Ultimately, that 300,000 poundsis used to calculate the percentage of Pennsylvania Class I Utilization for which Dairy A is liableto pay the Over-Order Premium.2 In the example, this amount appears to be 200,000 pounds.However, based on our review of the example in § 148.5(a), that same dairy is only eligible toreceive a distribution from the pool on 150,000 pounds. As such, it appears that under theseproposed regulations, a Class I processor will find itself paying into the pool on milk that will notbe eligible for pool distributions (the allotment). According to our calculations, the distributionfor Dairy A should be based on a minimum of 200,000 pounds instead of 150,000 and thusshould receive $649 instead of $525.3

While we cannot be sure, the disconnect seems to stem from the fact that Class 1processors apparently have to pay into the pool on out-of-state diversions and federally depooledmilk, but are not entitled to share in pool distributions on that same milk (per PennsylvaniaProduction Definition) (see example for § 148.4, Aa, Ka, La as it relates to the examples for §148.3 and § 148.5). If our interpretation is correct, this result was, we believe, unanticipated.Moreover, we believe that if the milk is not entitled to participate in the Pennsylvania pool, itshould not be subject to a pool charge. This unequal treatment would be inequitable and webelieve unlawful.

Additionally, Federally Depooled milk should be defined. Dean is concerned such lackof clarity leaves open the possibility that this section could be interpreted to mean that milk thatwas once shipped to a Federal Order Distributing Plant, but that is then shipped to a partiallyRegulated Class I Plant located in Pennsylvania, which is not subject to full Federal regulationby virtue of the level of route disposition in a Federally regulated territory, would be denied apool allotment. Such an interpretation, if correct, would be unfair in that there appears to be noparallel provision exempting such partial regulated Federal Class I Plant from having to pay intothe pool on such milk. Moreover, the Board provided no notice of such a result to the interestedparties at the time these regulations were being discussed and formulated.

Regarding § 148.5(a), Dean believes there should be a performance requirement for PoolPlants that are not Contributing Pool Plants in exchange for participation in the pool orentitlement to pool allotments. Otherwise, pooling as propose represents a wholesale wealthtransfer akin to a Taking. This is unlike the Federal Order System, which tends to impose

2 An important question remains how the Pennsylvania Class I Utilization (400,000 lbs) exceeds by 33% thePennsylvania Pounds of Production (300,000 lbs). The very fact that it does, suggests that Contributing Plants arepaying into the pool on a larger volume of milk than they are eligible to receive pool allotments on, or it suggeststhat double counting is taking place. Without a definition, it is not possible to pinpoint the exact cause of theproblem.5 Indeed, the pay-in to distribution ratio should not be one-for-one. Rather, Pennsylvania Class I plants generallywould have other classes of milk that should be eligible for pool allotments though not subject to the over-orderpremium charge.

9 DC#129011vl

performance requirements on manufacturing plants in exchange for the right to share in the poolWhile we think we agree with the Board's intentions in preparing § 148.5(b) regarding depooledmilk, Dean is concerned, as explained above, that the provisions regarding "depooled" milk maybe overbroad.

Conclusion

For the above-mentioned reasons Dean Foods Company respectfully requests that the

Board undertake a further revision of the Proposed Pooling Regulations to address the concerns

raised herein prior to the presentation of the proposed regulations to the Independent Regulatory

Review Commission and the General Assembly. Accordingly, Dean also requests the

opportunity to comment on any further technical revisions. Thank you for this opportunity to

provide the aforementioned comments.

September 23,2002 Respectfully submitted,

Charles M. English, Jr.Wendy M. YovieneThelen Reid & Priest, LLP701 Pennsylvania Ave, NW, Suite 800Washington, DC 20004(202) 508-4000

10 DC #129011 vl

^ E w

OriginalL 2;.18 DONN L. SNYDER

. A T TT "~ * ~ ' • - Phone: (717)257-7552

" Si. - ^ Fax: (717)257-7594

J L 1 N V _ J L L P '-•-'--•-".: i l O :. , i: ? C) [email protected] AT LAW ~ v

www.saul.corn

September 23, 2002

VIA HAND DELIVERY

Lynda J. Bowman, Executive SecretaryPennsylvania Milk Marketing Board2301 North Cameron StreetHarrisburg, PA 17110-9408

Re: Proposed Pooling Regulation -§ 148.1 - Definition of "Pennsylvania Production11

Dear Ms. Bowman:

Kindly be advised that the undersigned represents Pocono Mountain Dairies, Blakeslee,Pennsylvania. The purpose of this letter is to register a strong protest to the language in theproposed regulation which does not only not carry out the purposes of the regulation, i.e.,equitable distribution of over-order premium payments made by dealers, but rather in the caseof our client, will require this producer to reach in its pocket to pay other producers. Itreceives no over-order premium payments.

Please look at what happens in the case of my client compared to other cooperativeassociations. The larger cooperatives will receive $1.65 premium, 45% of which they mustshare with other producers. This $1.65 is an add-on to the price dealers must pay to theirproducers, and thus the pooling of 45 % of such charge is merely a reduction in the amount ofthe premium to an individual producer.

In the case of Pocono Mountain Dairies, however, there is no sale to a dealer andtherefore no premium from which to make the deduction. Pocono Mountain does not sell itsproduct to any handler, but rather pays a plant to process and package its milk. Obviously, ifthe contracting processing plant has to pay a premium on milk it never owns, and thus cannotrecoup the charge, (it has no way to pass on the premium to consumers), it will, if required topay the premium, simply pass it on disguised as a processing charge to our client, which is aproducer.

2 North Second Street, 7'" Floor • Harrisburg, PA 17101-1604 • Phone: (717) 257-7500 • Fax: (717) 238-4622

92539.19/23/02 BALTIMORE CHESTERBROOK HARRISBURG NEW YORK PHILADELPHIA PRINCETON WILMINGTON

A DELAWARE LIMITED LIABILITY PARTNERSHIP

September 23, 2002Page 2

Of potentially more significance, however, is the legal implication of forcing theproducer, whose price is not otherwise regulated, to pay a premium, albeit indirectly. Weseriously question the legality of this and earnestly request that you review the above provisionboth from a legal and equitable perspective.

Subsection (2) of the definition of Pennsylvania Production should be deleted,

Thank you for your consideration of this matter.

Very\truly yours,

ONN L. SNYDER

DLS/clj

cc: Pa. Milk Marketing Board MembersActing Chief Counsel

92539.1 9/2J/02

SEP-23-Q2 U:04AM FROM-GROSS.MCGtNLEY.LABARRE,&EAT0N 610-820-5277 T-960 P.02/04 F-6T7

Original: 2218

GROSS, MCGINLEY, LABARRE & EATON, LLP

MAJU7OLM J GROSS ATTORNEYS AT LAW

¥^£S£Ek*L 33 SOUTH SEVENTH STREETJ JACKSON BATON. 01 p Q. BOX 4060

SaiAiSV ALLENTOWN, PENNSYLVANIA 18105-4060WilXUMJ FKlES — — -. .,

SUSAN ELLIS WILD (610) 820-5450

^V&Z^^ TELEFAX (610) 820^6006 \ v^JOHN f GROSS E-MAIL [email protected]. ALPERT

September 23,2002 V *£

VIA FACSIMILE AND U-S- MAIL

Ms. Lynda J. BowmanExecutive DirectorPennsylvania Milk Marketing Board2301 North Cameron Street, Rm. 110Hamsburg, P A 17110-8408

Re: Draft of the Pooling Regulation

Dear Linda:

I am writing in response to your memo of September 6,2Q02 with the most recent revised draftof the proposed Pennsylvania Over-Order Premium Pool Regulations. On behalf of Land O'Lakes, I wish to thank the Milk Marketing Board for the opportunity to provide final suggestionsfor modifications which we believe will clarify and fulfill the intent of the board in publishingthis regulation.

1 have attached suggested modifications to the language found in Section 145.5(d) and 145.5(g),The words proposed to be stricken are shown in brackets and the words proposed to be added axeshown as underlined.

Section I48.5(d). It was Land O' Lakes understanding that the intent was for the cooperatives tobe paid directly by the state treasurer. We have added language which provides for a plant'sPool Allotment allocable to cooperatives to be paid directly by the state treasurer to suchcooperatives and the remainder of a plant's Pool Allotment will be paid TO the plant forredistribution to their qualified producers other than cooperatives.

Section 148.5(g). This section requires the monthly milk check from cooperatives to show theRedistribution Rate and the members Qualified Pounds, Actually, Land O' Lakes expects therate of Over-Order Premium actually paid 10 its members will be greater than the Redistribution

www gmle cum

SEP-23-02 1!:04AM FROM-GROSS,MCGINLEY.LABARRE,*EATON 610-820-5277 T-96Q P.03/04 F-677

Page 2September 23, 2002

Rate. Therefore, Land O' Lakes would like the alternative of showing that rate and the volumeof milk to which it is applied if it is higher than the Redistribution Rate.

Finally, Land O* Lakes believes it is reasonable that these new regulations would go inio effecton January I. We note the PMMB and the state treasurer's office have already done substantialwork in preparation for the implementation of the new regulations and Land O* Lakes believesthey should be implemented as soon as possible.

If it is possible, we would like to meet with you on Wednesday, September 25,2002 to reviewthe modifications we have suggested. There certainly is no "magic" in the specific words, butthe direct payment by the state treasurer and the ability to show the higher of the RedistributionRate or actual premium rate paid to the cooperative members is very important to Land O'Lakes.

Thank you for your continuing cooperation in this matter.

Sincerely,

nJ.JACKSON EATON, W

JJEJIl/dmEnclosurecc: Mr. John Nikoloff (via e-mail - [email protected])

Mr, Dennis Schad

>V.\WDOX\CLrENTSVlol.rcg\OvcrortJe\00007292DOC

SEP-23-02 11:05AM FROU-GROSS f MCGINLEY.LABARRE,«EATON 610-820-5277 T-96Q P.04/04 F-677

SUGGESTED MODIFICATIONS TO PROPOSED POOLING REGULATIONSECTION 148.5(d)

On or before the 13* of the month following receipt of reports required by Section

148.2, ihe State Treasurer shall moke payment of the Pool Allotment [to each Pennsylvania Pool

plant receiving payments] as follows:

1. That portion of the Pool Allotment of each Pennsylvania Pool Plant which is

allocable to milk delivered by cooperatives in accordance with the reports filed pursuant to Section

148.2 shall be paid by the State Treasurer to such cooperatives.

2. The amount of the Pool Allotment of each Pennsylvania Pool Plant less the amount

paid pursuant to section 148.5(d)(l) to cooperatives which delivered milk to such plant shall be

paid by the State Treasurer to such Pool Plant for redistribution to their qualified producers whose

milk was not delivered bv a cooperative.

SECTION I48,5(g) as follows:

(g) Cooperatives shall show by line item on their monthly statements to members:

1. -JtiP&e Redistribution Rate and the member's Qualified Pounds to which the

Redistribution Rate is applied, or

2. The cooperative may show rate (in dollars per hundredweight) of the Over-Order

Premium Value paid to such member and the total member hundredweights of milk to which such

rate is applied if such rate if greater than the Redistribution Rate,

W \WTJOX\CLia4TS\lol\pooiV00C)07l46.DOC

Original: 2218

KLETT ROONEY LIEBER & SCHORLINGA PROFESSIONAL CORPORATION

ATTORNEYS AT LAW

240 N. THIRD STREET, SUITE 600HARRISBURG, PENNSYLVANIA 171OM5O3

Telephone (717)231 -7700 \ r ~.Allen C Warshaw FACSIMILE (717) 211 ^7712(717) 231 -7718 E-MAIL: acwarshawjjgkleitrripiKy.com

September 23,2002 V '...'.;•

VIA HAND DELIVERY

Ms. Lynda Bowman V ^Milk Marketing Board V; ;X2301 North Cameron Street " \,Agriculture BuildingRoom 110Harrisburg, PA 17110

Re: Pooling Regulations

Dear Lynda:

You have asked us to comment on the latest version of the proposed pooling regulations.We will do so, but without prejudice to our previous comments and objections to pooling as aconcept and as embodied in the proposed regulations. In this regard, I would note that PAMDjoins fully in the comments more recently submitted on behalf of Dean Foods, Inc.

First, it is not clear how the Board will fund its activities under the proposed regulations.PAMD believes that those activities should be funded out of the pool, rather than the Board'soperating budget. As you know, PAMD members are the primary source of funds for theBoard's operating budget. PAMD firmly believes that its members should not be required tofund pooling which they vigorously oppose and which they contend is harmful to them.

Second, the following terms are used by not defined in the regulations:

1. Cooperatives;2. Producer purchases;3. Pennsylvania Class I Utilization;4. Directly distributed Over-Order Premium Value; and5. Qualified Pounds.

Third, in the Example, the Pennsylvania Class I Utilization number appears to includemilk purchased from out of state producers since it is larger than the Pennsylvania Production.That means that Dealers are paying premium based on milk not purchased from Pennsylvaniaproducers. That is not appropriate.

KJILSHAR:21!77.1

PENNSYLVANIA DELAWARE NEW JERSEY WASHINGTON, D.C.

KLETT ROONEY LlEBER & SCHORLINGMs. Lynda BowmanMilk Marketing BoardSeptember 23, 2002Page No. 2

In addition, the definition of Pennsylvania Production seems to include milk that wouldnot now he subject to the Over-Order Premium. Specifically, milk sold to Pennsylvania PoolPlants regardless of the location of the plant of physical receipt appears to include milk which isshipped and, therefore, processed and/or sold out-of-state. That milk is not presently subject tothe Pennsylvania Over-Order Premium but would be under the proposed regulation.

Finally, the regulations should be clear that the Pool Plant is not required to make thePool Allotment payment to producers until it receives the money necessary to make thai paymeniback from the State. The regulations should also provide that if that payment is not receivedbefore the Pool Plant has made its producer payments on the 17th of the month, the obligation tomake that Pool Allotment payment shall be delayed until the next month so that the Pool Plantwill not have to go through three payment processes in the same month.

Sincerely,

Allen C. WarshawFor KLETT ROONEY LIEBER & SCHORLING

A Professional CorporationACW:gkd

KRLSHAR:2U77.i

09/23/02 )[0N 16:22 FAX 2380791 MILS PAW & BESHORE i3 002

Original: 2218

MARVIN BESHOREAttorney at Law

130 STATE STREET, P.O. BOX 946HARRISBURG, PA 17108-0946

Email: [email protected]

Telephone: (717) 236-0781 Fax: (717) 236-079!

September 23, 2002 ;

Via Fax ;-•:•Ms. Lynda JL Bowman, Executive SecretaryPennsylvania Milk Marketing Board ;. :

2301 North Cameron Street, Room 110 [ *;;Harrisburg, PA 17110 [ r —

In Re: Proposed Over Order Premium Pool Regulations: Draft 5

Dear Ms. Bowman:

I am writing on behalf of Dairy Marketing Services, LLC, Dairylca Cooperative Inc., andthe Northeastern Council of Dairy Fanners of America, Inc., in response to your memorandum ofSeptember 6* 2002 with the proposed "Draft 5" over order pooling regulations.

DMS, Dairylea, and DFA*s Northeast Council remain steadfastly opposed to any order orregulation of the PMMB which pools any portion of the over order premium.

The proposed regulations are quite detailed and necessarily complex. In that context andin view of other urgent regulatory and legislative matters of importance to the members of thesecooperatives, they have not had the opportunity to scrutinize the proposed regulatory languagefor its effectiveness in accomplishing the premium pooling objectives.

Thank you for your assistance.

syyvpntyyv

tore

MB:

cc: Ed Gallagher (via fax)

jchneider *va£lety 'panmt &aintf, - irrc · re: marketwide pooling of the pmmb mandated...

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