May 2, 2001 STATEMENT BY E. LINWOOD TIPTON, PRESIDENT & CEO OF THE
INTERNATIONAL DAIRY FOODS ASSOCIATION
The release of a study today by researchers at the Univ. of CT is clearly
more about politics than about facts. The study's
release coincides with the introduction of legislation to continue and expand the use of interstate dairy compacts and uses
statistical sleight of hand to arrive at what appear to be pre-determined conclusions of the authors.
The study purports to analyze the impacts of the Northeast Interstate
Dairy Compact, however, a quick review of the study's
key points reveals that the numbers just don't add up. The study's authors have mixed methodologies to arrive at the results
they want. For example, they conclude that farmers have received an added benefit of $128.5 million as a result of the higher
compact price. However, they also conclude that consumers paid a premium of only $19 million due to compact induced
higher prices. One has to wonder where the other $109.5 million came from to pay the farmers. The numbers don't add up.
The authors conclude that processors paid only 4.5 cents more per gallon
for milk because of the Compact's minimum price
rule. However, a comparison of the Compact minimum price with the federally regulated minimum milk prices since July
1997 when the Compact went into effect clearly shows a 13.8 cent per gallon difference for the months a compact premium
was paid. Therefore, the 11 cents per gallon the authors attribute to increased profits for retailers and/or processors is
grossly inflated. Again, the numbers don't add up.
The study also makes unnecessary and disparaging statements about milk
processors based on absolutely no data on the
wholesale price of packaged milk. No numbers here to add up!
The one thing that is undisputed by the authors is that consumers have
paid more for milk as a result of this flawed policy.
This transfer of money from milk consumers to dairy producers particularly hurts families and those living on lower and fixed
We need a national dairy policy that provides a safety net for farmers without putting a tax on consumers.