APPELLATE PANEL GIVES DAIRY FARMERS PARTIAL RELIEF
Department of Agriculture Greets Ruling as Step Toward SolutionFor Immediate Release: December 28, 2006
Contact: Jeff Beach
(TRENTON) – An appellate court decision on actions to aid dairy farmers in New Jersey was called “a step in the right direction” by New Jersey Department of Agriculture officials today.
The decision, issued yesterday by a three-judge Appellate Division panel, upheld most of an earlier order by the Department to address the way in which milk producers are paid by those who buy their product. A “fuel adjuster:” payment per hundredweight of milk (literally 100 pounds of fluid milk) was upheld by the panel. However, the judges said the Department needed more specific local information to justify a 76-cents per hundredweight payment by processors who require that milk be free of the synthetic hormone rBST, which is used to increase milk production per cow.
The panel rejected the appellant New York State Dairy Foods Inc.’s contention that numerous “deficiencies” in the way the decision was reached during and after a series of hearings should have rendered all of it null and void. The company had claimed the notice announcing the hearing was not specific about what types of additional payments to farmers would be considered and that some potential witnesses decided not to testify because they weren’t guaranteed in advance the right to keep certain financial information confidential.
The panel ruled that the Department’s hearing notice contained enough specifics to uphold the order and that the hearing officer’s decision not to provide a blanket ruling giving witnesses the ability to refuse to answer certain financial questions did not keep people from testifying, as the appellants had claimed.
“This decision to reject all the procedural arguments and to uphold the fuel adjuster is a good first step toward helping New Jersey’s dairy producers remain viable,” said Al Murray, the Department’s Director of Marketing and Development, who in his role as Director of Milk Control for the state served as the hearing officer and issued the order. “We are obviously disappointed that the rBST-free premium was not upheld. Clearly, we would disagree that the documentation we used to arrive at the rBST-free premium was insufficient, and we will immediately begin the process of collecting additional information, specific to local processors and others in the market chain, in order to remedy that situation.”
The Department’s order on dairy pricing, issued on September 28, included both long- and short-term approaches to stabilizing prices received by dairy farmers. In the long-term, the Department is requiring more detailed reporting of financial information throughout the market chain from any entity required to obtain a dairy license from the State. Those long-term requirements were not part of the Appellate Division challenge.
However, the short-term approaches of the fuel adjuster and rBST-free premium were challenged by New York State Dairy Foods Inc., a company that represents various dairy processors in New York and New Jersey.
“All in all, this decision will ultimately benefit our dairy producers,” Director Murray said. “We have the Appellate Division’s blessing on the fuel adjuster and they have given us a firm understanding of what we need to correct for the rBST-free premium to pass muster.”
The Department ordered the fuel adjuster payment because milk producers typically must pay the price of hauling their milk to the processor. With recent increases in diesel fuel, along with corresponding drops in what producers were paid for their milk, the Department saw the need for the adjuster. It will increase or decrease by 3 cents per hundredweight for each 10-cent change in the cost of diesel fuel, based on a starting point of the 2002 price for diesel.