Maintaining the Viability of Dairy Farms in the Garden State

The last decade has been an era of extreme economic distress for the dairy industry, nationwide and in New Jersey. During early FY98, with the cost-price dichotomy exacerbated by the drop in minimum prices set at the federal level for raw milk, dairy farmers and cooperatives petitioned NJDA for price relief.

In November, the department scheduled a public hearing to take testimony from representatives of the dairy industry and others in an effort to determine the severity of the problem and assess possible relief measures which could be instituted by the department. Testimony from dairy farmers clearly indicated that, for some time, most of them had been receiving less for a hundredweight of Class 1 fluid milk than it cost to produce it, despite often dramatic increases in the amount of milk they produced and the overall efficiency of their operations.

To provide some temporary relief, the department implemented a six- month emergency regulation which set a minimum farm price of $16.89 per hundredweight for Class 1 milk processed in New Jersey. The regulation garnered $662,232 above the federally-mandated payments for New Jersey dairy farmers. Despite this very positive impact on the state's dairy farmers, the emergency price had no effect on prices paid by consumers for beverage milk.

The department continued to offer a variety of projects aimed at improving both the short- and long-term viability of the dairy industry. Whole herd health and management programs, including Johne's disease and mastitis control; financial management training; nutrient and crop management; and waste management improvements were all part of a comprehensive effort to help the state's dairy farmers become more profitable.

In FY98 the department provided staff support and a $100,000 grant to the New Jersey Farm Bureau to continue the dairy self-help program for milk producers. The effort is a continuation of the Garden State Milk Quality Initiative begun in 1995 as a joint effort with Rutgers Cooperative Extension to help dairy farmers improve milk production and quality.

Fifty-eight dairy farmers participated in the voluntary dairy self- help program recommended last year by the New Jersey Dairy Task Force. Bulk tank samples were collected and cultured to test milk quality and those results suggesting a health problem in a herd were then followed up with samples from each cow. Average somatic cell counts (SCC), indicators of milk quality and herd productivity, were taken for each herd since high SCC suggests less than optimum milk quality and herd productivity.

Thanks to this program, the average SCC in participating herds has continued to drop. Given the improved milk yield resulting from lowered SCC, participating farmers received an average return of $12,000 through the program this year. Milk quality bonuses given by some cooperatives and processors raised the figure for some farmers.

Through the financial management program launched this winter, 18 producers have completed in-depth analyses of net worth, cost of production and cash flow. Several producers used the data to obtain new financing for herd expansion and capital improvements such as new barns, milking parlors and machinery. The program will be expanded statewide next year.

Dairy Licensing, Bonding and Enforcement

In keeping with the mandate to maintain competition among New Jersey milk marketers, the department licensed 10,947 milk dealers, milk processing plants and retail stores and collected $369,391 in fees and penalties during FY98. Penalties collected from stores and dealers for a variety of infractions increased by $2,648 over the total for FY97.

Among the services provided by the department to New Jersey's dairy industry were the licensing and bonding of milk dealers to assure payments to producers, the dissemination of information needed by the milk industry and the mediation of disputes within the milk processing and distribution industry. Field investigators conducted inspections of 2,500 retail outlets to ensure that they were licensed and adhering to the milk control laws and regulations.

Data Collection and Information Dissemination

In order to assess activities in the marketplace and to provide information for program and performance analysis, the department collects, processes and disseminates information on prices received by dairy farmers, milk production, milk sales, supermarket milk prices and other pertinent market data.

Dairy Organizations and Activities

The department continued to provide administrative support for the Garden State Milk Council and the Dairy of Distinction Program. Department employees helped assess candidates for the Dairy of Distinction award, staffed dairy industry meetings, and served as guest speakers at schools around the state to acquaint New Jersey youngsters with the state's dairy industry.

Dairy of Distinction Honors Awarded

Two New Jersey dairy farms received the Dairy of Distinction award this year. The honor is awarded annually to those dairy operations that are deemed the best representatives of the industry by virtue of general farm maintenance, farm efficiency, creativity, dedication and achievement in a rapidly changing marketplace. This year's honorees were the Wagner Farm in Bordentown, operated by the state Department of Corrections, and the Yellow Frame Dairy in Newton.

Through NJDA's inspection and grading programs, growers obtain the certification they need to sell produce and plants to other states and nations. The Jersey Fresh Quality Grading Program and the commodity inspection and grading programs are among those offered by the department to help ensure a constant supply of high quality, properly labeled produce, poultry, red meat and seafood products for consumers, in New Jersey, throughout the nation and around the world.

Jersey Fresh Quality Grading Program

The Jersey Fresh Quality Grading Program is a voluntary program designed to increase sales of more than 70 New Jersey agricultural products, including fruits, vegetables, salad mixes, fresh herbs, shell eggs and cut flowers. After registering with the Quality Grading Program, growers are permitted to use the Jersey Fresh logo on their packages, indicating that the contents have been inspected and meet quality standards equal to or better than U.S. No. 1. The use of the Jersey Fresh logo in any manner requires a license from the Quality Grading Program.

This inspection standard adds a quality assurance note to the overall Jersey Fresh marketing program that is welcomed by wholesale produce buyers and consumers who want high quality products uniformly sized and packed. In addition, the Jersey Fresh Quality Grading Program helps Garden State growers stand out in an increasingly competitive regional and national marketplace.

The economic benefits of joining the program were reflected by the record-setting 227 growers who enrolled in the program in FY98. This year more than 128.6 million pounds of product were packed under the Quality Grading Program. The program continued to supply Jersey Fresh twist ties to licensees at cost, thus bringing the Jersey Fresh logo into the consumer's home.

Commodity Inspection and Grading

With food quality uppermost in consumers' minds, the commodity inspection and grading service offered by the department is particularly important. Most such inspection services are paid for by those for whom the grading and inspections are done. In a time of shrinking state resources, this kind of self-sustaining program is particularly important. In FY98, the program collected over $1.2 million in fees for services rendered.

Inspections performed for the poultry industry certified 1,166,182 cases of shell eggs as Grade A while 44,313,789 pounds of turkey and 11,265,230 pounds of chicken also met specified standards. Over 558 million pounds of liquid or frozen egg products and more than 9 million pounds of dried egg product were processed under departmental inspection supervision.

The inspection and grading unit also worked with growers, shippers, receivers and processors of fresh produce marketed through inter- or intrastate commerce. Inspections were made at shipping point on 7,407,226 pounds of produce, including most fruits and vegetables grown commercially in New Jersey, to ensure that it met specific standards. Terminal market inspections were also performed on 43,158,432 pounds of fresh fruits and vegetables received from other growing areas.

Inspections and certifications at two packing sheds enabled growers to ship over 2.9 million pounds of blueberries to Canada, a $3 million addition to New Jersey's agricultural economy. Tomato processing facilities also contracted with the department for grading of nearly 38,835,300 pounds of tomatoes to ensure that they met grower-processor contract specifications.

Even the youngest consumers in the state benefited from the department's inspection efforts as inspectors at several plants certified over 270,630 pounds of diced chicken under USDA specifications for use in the federal school lunch program.

The fish and fisheries products inspection program, begun in 1986 and operated in cooperation with the United States Department of Commerce, enables the department to provide a broad range of inspection and grading services to New Jersey's commercial fishing industry, including plant sanitation surveys, product quality grading and export certification. During FY98, 15,024,300 million pounds of fresh, frozen and canned fish were certified and inspected at the wholesale level.

The Bureau of Commodity Inspection and Grading continued to maintain contact with the state Office of Consumer Protection and the Office of the Regional Director for the federal Perishable Agricultural Commodities Act in order to provide timely and proper responses to misbranding complaints.

Commodity Licensing and Bonding

Under the commodity licensing and bonding program, the department offers economic protection for New Jersey farmers who sell perishable agricultural commodities or hay, grain and straw to dealers and brokers on a credit basis. Licenses were issued to 130 produce dealers, 21 hay, grain and straw dealers, 13 shell egg dealers and two live poultry dealers. Bonds totaling $4,413,409 were received and posted by the division. More than $4,000 worth of growers' claims against buyers for payment for product delivered were settled.

Agricultural Chemistry

Approximately 442,280 tons of animal feed, over 193,247 tons of fertilizers and more than 231,712 tons of liming material were sold in New Jersey last year. Through inspection, sampling and laboratory analysis of these products, coupled with enforcement actions against producers of mislabeled or substandard products, the department protects crop yields and promotes animal growth.

This year, 809 feed, fertilizer and lime manufacturers and distributors registered with the department. Field inspections covered 1,983 lots of feeds, fertilizers and liming materials to determine compliance with labeled guarantees. Of the 208 feed samples and 149 fertilizer samples collected for laboratory analysis, just over two percent of the feed samples and 10 percent of the fertilizer samples failed to meet the minimum nutrient levels stated on their labels. Of the 27 liming materials sampled, one failed to meet the nutrient label. Label or registration violations found during field inspections resulted in those items being removed from sale.

Through the agricultural chemistry program, a total of $79,810 in registration fees and $99,675 in tonnage inspection fees was collected. In addition, penalties totaling $7,088 were assessed for fertilizer content violations, of which $1,100 was refunded to farmers. Remaining penalty dollars were transmitted to the State Treasury.