Last week the Vermont Milk Commission heard from IDFA, its members, retailers and even some dairy farmers that its proposed milk premium could drive consumer prices up and drive dairy companies out of Vermont. The proposal, referred to by some as a "milk tax," would require milk processors to pay a minimum price of $27.00 per hundredweight for fluid milk sold at retail in the state.

Carl Herbein, a dairy cost accounting expert with 25 years of industry experience, represented IDFA at the hearing. He testified that dairy processors could not absorb the price increase – which represents about 10 percent of the cost of raw materials – and remain in business. He also challenged the data and many of the assumptions used by the Vermont Milk Commission to develop the proposal.

"In an economy with rising costs of production and business operations, it is inaccurate to suggest the processors and retailers are generating 'surplus' profits," Herbein told the commission. "Adding new state price regulations, as proposed by this legislation, could limit products available to consumers in your state, or even force companies out of business."

Dean Foods Company, the Vermont Grocers' Association and New York State Dairy Foods, Inc. were among those who testified. The day-long hearing, which was held in Montpelier, Vt., on September 9, was covered by Vermont Public Radio and WCAX, Channel 3.

The Vermont Milk Commission will continue to accept written statements postmarked no later than September 24. IDFA encourages all members with an interest in Vermont to submit comments if they have not done so already. The next hearing to discuss the proposal will be held October 16.

For more information, contact Ruth Saunders, IDFA senior director of policy and legislative affairs, at rsaunders@idfa.org or 202-220-3553.