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Northeast senators ask for milk pricing investigation
(Monday, April 14, 2003 -- CropChoice news) -- Responding to pressure from dairy farmers wondering why retail prices remain stubbornly high in light of low farm-level prices, a handful of Northeastern senators is asking the investigative arm of Congress to examine the farm to retail price spread.
Sen. Olympia Snowe (R-ME) made that request to the General Accounting Office last week, along with Sens. John Kerry (D-MA), Hillary Rodham Clinton (D-NY), Patrick Leahy (D-VT), and Susan Collins (R-ME).
"Our dairy farmers are getting less and less of the consumer dollar," Snowe said. "There is no reason that the price for farm milk should be declining, while the price for retail milk remains unchanged. I want to get to the bottom of this problem so the 400 dairy farmers in Maine are not being treated unfairly."
Snowe cited figures from Agricultural Marketing Service (AMS) of the U.S. Department of Agriculture showing that since the Northeast Interstate Dairy Compact ended on Oct. 1, 2001, the price paid to dairy farmers for a gallon of Class I milk has dropped by 50 cents. The corresponding retail price for milk when the compact ended was $3.08 per gallon; today it remains about $3 per gallon.
Sen. Leahy asked the GAO to perform a similar investigation several years ago. That report concluded that the farm to retail price gap has increased in the past decade, although it made no conclusions as to why that is happening, or what should be done about it.
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