Testimony on the Impact of the Northeast Dairy Compact and Market Channel Pricing Strategies on the Performance of the New England Dairy Industry

Using recently obtained data on cooperative premiums that give us a more direct estimate of the actual prices paid by processors for raw milk in New England, we have recalculated our impact models. The Northeast Dairy Compact’s impact on consumers, computed net of changes in cooperative premiums engendered by Compact implementation, is 2.7 cents per gallon. In our original study it was 4.5 cents per gallon. The difference is due to a reduction of 1.8 cents per gallon in cooperative premiums. This reduction occurred because cooperatives deferred to the Compact, eliminated power premiums, and charged only for the cost of actual services provided to milk processors