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Federal Milk Price Supports Drop to 10-Year Low on Jan. 1

December 31, 1987

WASHINGTON (AP) _ The Agriculture Department will greet farmers on New Year’s Day with a 50- cent reduction in the price support of milk to a decade low of $10.60 per 100 pounds.

Agriculture Secretary Richard E. Lyng said Wednesday the reduction, equal to about a penny a quart, was ordered under the Food Security Act of 1985. The law requires a reduction in the support price on Jan. 1 if the Agriculture Department estimates it will boost surpluses over a certain level in calendar 1988.

No significant impact on consumer prices is expected as a result of the cut in price supports. Department economists say retail prices of dairy products as a group in 1988 could decline from this year or rise by as much as 2 percent. Food prices overall are expected to go up 2 percent to 4 percent in 1988.

The dairy program involves the purchases, or ″removals,″ of surplus butter, cheese and non-fat dry milk by the department’s Commodity Credit Corp. to keep prices paid to farmers from dropping significantly below the support level.

Supports have been lowered progressively since 1983 when the floor was $13.10 per hundredweight to discourage further surplus production.

Total U.S. milk production in 1987 is estimated at about 142 billion pounds, down about 1 percent from 1986. However, USDA economists say milk production will rise again in 1988, despite the lower support price.

Lyng said the Jan. 1 support price could remain in effect until Jan. 1, 1991. However, the 1985 law provides that it can be increased or decreased 50 cents on Jan. 1, 1989, and again on Jan. 1, 1990, on the basis of annual Commodity Credit Corp. surplus removals.

In a related action, Lyng announced regulations carrying out an assessment on dairy farmers ordered by Congress in the fiscal 1988 budget bill signed by President Reagan last week. The assessment, which also begins on Jan. 1, amounts to 2.5 cents on every 100 pounds of milk produced for commercial use.

The assessment is expected to raise about $57 million to help defray the costs of the dairy program.

Lyng said that as a result of the lower supports on Jan. 1, the Commodity Credit Corp. will reduce its prices paid for surplus dairy products. Butter will be bought for $1.32 per pound, down 3.75 cents; block cheddar cheese, $1.1525 per pound, down 4.75 cents; barrel cheese, $1.1125 per pound, down 4.5 cents; and non-fat dry milk, 72.75 cents per pound, down 4 cents.


WASHINGTON (AP) - A private company has been given approval by the Agriculture Department to conduct limited field trials of genetically altered tobacco plants that can survive the spraying of chemical herbicides after the surrounding weeds have been killed.

Officials said Wednesday that the tests are a step toward effective weed control on a variety of crops, which could boost U.S. agricultural production substantially.

Donald L. Houston, administrator of the department’s Animal and Plant Health Inspection Service, said permits were issued to Calgene Inc. of Davis, Calif., which is scheduled to begin tests in January near Gila Bend, Ariz.

The chemical weedkillers are bromoxynil and glyphosate, which belong to a new generation of herbicides that degrade rapidly in the environment, he said. They also are less toxic to animals than many other herbicides commonly used to fight weeds.

Houston said the tobacco plant was selected for the experiment because its genetic structure is easy to manipulate in the laboratory.

″If we can stave off the debilitating effects of weeds with herbicide- tolera nt plants, the economic impact on American agriculture, in terms of increased productivity and lowered costs, could be enormous,″ he said.

Before issuing the permits for the chemical field trials, the USDA ″thoroughly reviewed the methodology and scientific data provided by Calgene,″ Houston said. ″All data confirm these trials are safe, and they will not have a significant impact on the environment.″


WASHINGTON (AP) - Farmers can sign up in the government’s 1988 commodity programs Feb. 16 through April 15, Agriculture Secretary Richard E. Lyng announced.

A number of changes are being made in the 1988 programs as the result of legislation passed by Congress, he said Wednesday. Those will be announced as quickly as possible.

The program signup will affect farmers who produce wheat, feed grains, cotton and rice.

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