The Burlington Free Press May 6, 2001

Laying blame for milk cost

 By Erin Kelly
 Free Press Washington Writer

 WASHINGTON -- Vermont dairy farmers and consumer advocates say a new report by University of Connecticut
 researchers confirms what they already knew: Big processors and supermarket chains are using the Northeast Interstate
 Dairy Compact as an excuse to raise consumer milk prices to boost profits.

 Millicent Rooney of Monument Farms in Weybridge can tell by looking at the grocery shelves.

 "We know that the retailers, in our case, are adding as much as 90 cents extra onto the store price," said Rooney, whose
 business produces and processes its own milk and is one of only two independent processors left in Vermont.

 Retailers have "increased the price when we as processors and distributors have not increased ours," Rooney said. "I
 know what we charge, and then when we go into the stores and see milk for $3.49 a gallon, it just makes me cringe."

 The compact, which took effect in July 1997, forced milk processors to pay farmers about 6 cents more per gallon. Big
 retailers and processors -- who oppose the compact -- then charged consumers an average of 20 cents more per gallon,
 researchers Ronald Cotterill and Andrew Franklin concluded in the University of Connecticut report released last week.

 The president of the Food Marketing Institute, which represents the supermarket industry and opposes the compact,
 questioned the timing of the report. It became public Tuesday, a day before House members introduced legislation to
 extend and expand the dairy compact. The compact is set to expire Oct. 1.

 "Votes for that bill will disappear if the proponents are forced to admit the uncomfortable truth that it was the dairy compact
 that pushed up milk prices for consumers," Tim Hammonds, the institute's president and chief executive officer, said in a
 statement last week. "This report is an attempt to shift the blame for rising milk prices in the Northeast away from the
 political arena where it belongs."

 Consumer advocates in Vermont say it is the retailers and most processors who are trying to shift blame in an effort to
 defeat the renewal and expansion of the dairy compact so they won't have to pay a minimum price to farmers for milk.

 "The report itself is very strong evidence about where the blame for high milk prices lies," said Paul Burns, director of
 advocacy for Vermont Public Interest Research Group, a nonprofit consumer and environmental group. "It seems retailers
 and processors are ripping off consumers and pointing the finger of blame at farmers."

 A security thing

 Burns said the compact benefits consumers by ensuring a local supply of fresh milk. Consumers could end up paying
 higher prices if milk had to be brought in from farther away, he said.

 "Consumers in Vermont also have a vested interest in preserving our way of life, which includes dairy farms," Burns said.

 Jacques Couture, a Westfield dairy farmer, said he hopes the report will make consumers realize the farmers are not
 making a windfall from the compact.

 "For the farmers, the dairy compact is a security thing; it's like a minimum wage so that we know the price won't drop
 below a certain level," Couture said. "The big thing about it is that it doesn't cost taxpayers a thing. There are a lot of
 agricultural subsidies funded by the government, but this isn't one of them. So if it doesn't cost taxpayers money, and it
 benefits the farmers and gives consumers a local supply of fresh milk, then what's the big problem?"

 Dairy farmer Robert Foster, of Foster Brothers Farm in Middlebury, said he worries that consumers still might be left with
 the erroneous impression that the compact has somehow caused higher prices, even if the farmers aren't to blame.

 The truth, Foster said, is that retailers and processors gouged consumers before the compact ever took effect.

 "Before the compact, when the prices they paid us dropped, they didn't lower the price for consumers," Foster said. "They
 just took advantage of the dip to widen their profit margins. What they're doing now is just more of the same."

 Foster, who has about 300 cows, said the dairy compact played a crucial role in his decision this year to stay in business.

 "The compact gives you a little bit of hope," Foster said. "You can't plan for the future if you don't know how low milk prices
 are going to drop. The compact really changes your mindset by guaranteeing you that the price won't drop beyond a
 certain point."

 If the compact is not renewed, Foster said, he fears for the future of his farm, which was founded by his great-grandfather.

 "We'd try to figure out some way to stay in business, but it would be much more difficult," Foster said. "I'd hate to see it all
 thrown away."