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Pennsylvania Ag News Headlines
Pennsylvania milk price elimination hurts processors, farmer
Pennsylvania Ag Connection - 11/20/2023

The study, commissioned by the Pennsylvania Milk Marketing Board, found that most of the state's fluid milk processors would go out of business if minimum pricing were eliminated. Milk consumption would only increase by 1.3%, the study found.

Critics of minimum pricing have long argued that it hurts consumers by driving up milk prices. However, the study found that eliminating minimum pricing would only lead to a 5% to 8% decrease in retail milk prices.

In addition, the study found that bidding wars between large retailers could put 57% of milk processors at risk of bankruptcy. This would have a ripple effect on dairy farmers and the rural economy, leading to losses of up to $2.8 billion.

Supporters of minimum pricing say it helps to maintain the state's large number of family-owned milk processors. Pennsylvania has 41 licensed fluid milk plants, six of which are owned by cooperatives. Comparable states have fewer but larger fluid milk plants.

The study's findings suggest that eliminating minimum pricing would have a significant negative impact on Pennsylvania's milk industry. The state should carefully consider these findings before making any changes to its minimum pricing policy.

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