Pennsylvania Milk Board details why milk premium expired on July 1
Introduced in 1988, the over-order premium supplemented prices established under Federal Milk Marketing Orders (FMMO). In recent years, it generally amounted to $1.00 per hundredweight, with an additional fuel adjustment. Pennsylvania incorporated the charge into its minimum retail price for Class I drinking milk, so shoppers buying fluid milk throughout the state financed it.
Eligibility for payment depended on where milk was processed and how it was used. Farmers received the premium only when their milk was bottled and sold for drinking within Pennsylvania. Milk sent to processors outside the state, or used in Class II, III or IV products, including yogurt, cheese and milk powder, did not qualify. According to the board, changes in drinking-milk consumption and increased milk shipments between regions had weakened the arrangement's effectiveness.
The board said consumers had received insufficient consideration in its premium decisions. Commonwealth Court case law requires it to weigh the interests of consumers alongside those of farmers, processors and milk haulers. Its June 3 hearing included testimony from Madison Weaver, an Ephrata resident. The board identified this as the first occasion on which someone had testified before it exclusively as an individual consumer.
Pennsylvania Agriculture Secretary Russell Redding, the Pennsylvania Farm Bureau and Dairy Farmers of America had argued that the distribution rules disadvantaged farms supplying manufacturing facilities or customers across state boundaries. The Pennsylvania Association of Milk Dealers, which represents independent bottlers, supported retaining the premium. It argued that the payment gave farmers an important financial reason to maintain supplies to local Class I plants.
In its order, the board said the statutory purpose was to enable Pennsylvania producers generally to recover production costs and earn a reasonable profit. It rejected the interpretation that the premium had been established to encourage farmers to supply particular volumes to fluid-milk processors. The premium fell from $1.00 to 50 cents per hundredweight in April, then expired on July 1 when chairman Rob Barley and members Jim Van Blarcom and Kristi Harper could not agree on an arrangement for July–December 2026.
In October, the board turned down a Pennsylvania State Grange request for a hearing. Neither Van Blarcom nor Harper seconded Barley's motion to hold one. A separate legislative proposal would have authorised the state to collect premium receipts itself and distribute the pooled funds among all dairy farmers. That Senate bill cleared the Agriculture and Rural Affairs Committee in May 2025 but did not advance to a vote by the full Senate. The Northeast FMMO benchmark for September stood at $19.19 per hundredweight.
