Four hundred Utah and Idaho dairy farmers protested the drop in wholesale milk prices they said could put many of them out of business, but they disagreed over what to do about it.
They met Monday with Rep. James Hansen, R-Utah, and Charles N. Shaw, leader of the Dairy and Sweetener Group in the U.S. Agricultural Stabilization and Conservation Office.Leon Savage, a Hyrum dairy farmer who organized the meeting, said that since January 1990, milk prices for producers have declined $4.20 per hundred pounds, most of the decline coming since August.
"If this price reduction continues, dairy farmers in Cache County alone stand to lose over $14 million," he said.
"We don't know the cause so we don't know what to ask for, but we know that if we don't keep fighting, we won't survive," he said.
"The price squeeze has us trapped in a dilemma," said Cleon Chambers, a Smithfield dairy farmer. "In order to survive we buy more cows to produce more milk, but it's overproduction that has lowered the price in the first place."
Chambers said about half the dairy farmers favored a production-quota system. He would like to see a two-tiered price system based on quotas, with farmers receiving a base price of $15 per hundred pounds and surplus milk being exported at $8.
Opponents contend a quota system does away with competition in the marketplace and locks out future generations.
Shaw blamed the price decrease mainly on the 3 percent increase in dairy production in 1989-1990.
He said that since the 1991 fiscal year began in October, the federal government has purchased 167 million pounds of butter, compared with 142 million pounds during the same period the previous year, and has purchased 62 million pounds of cheese, while it purchased none last year.
Asked why the price of milk has remained about the same in retail stores, he said "retail prices don't follow wholesale price movements penny-by-penny, day-by-day.
"Since many people here (in the audience) seem to want government out of the dairy business, I doubt you would want government controlling retail prices," he said.
Shaw said the Senate Agricultural Committee has asked the General Accounting Office to investigate complaints of possible price-gouging at the retail level.
Many dairy farmers blamed imports from countries where the dairy industry is subsidized.
Hansen said import decisions are usually "political" but promised to do what he can to see that imports meet the standards required for American products.