Regulators bid to preserve LV dairy industry

Friday, Sept. 17, 1999 | 11:03 a.m.

The Nevada Dairy Commission is bailing out of a federal milk-pricing system commissioners said could have destroyed Southern Nevada's tiny dairy industry.

Commissioners voted Thursday to amend state regulations grouping Clark County dairy farms within the "Great Basin Federal Order," one of 31 "milk orders" nationwide.

Instead, Southern Nevada dairy prices will be administered by the state's Dairy Commission.

The U.S. Department of Agriculture was asked in 1996 to overhaul the milk order system, which has been in effect since the 1930s. The agency's solution would have trimmed the number of milk orders to 11 and grouped dairy farms in Clark, Lincoln and Nye counties with farms in Arizona.

Southern Nevada's lone milk processor, Anderson Dairy, said the move would have forced it to pay a higher price for milk from its three Nevada suppliers and forced the company out of business.

The Dairy Commission's action, approved 2-0 following a public hearing, was applauded by Anderson officials and the Teamsters union, which represents about 400 dairy workers. Dairy Commission Executive Director Stacy Jennings said her staff's analysis of the proposal indicated consumers would be spared cost increases of as much as 6 cents per gallon of milk as a result of the move.

"What this means to us is that we will not be paying more (for raw milk) than our competitors," said Anderson Dairy spokesman Dave Coon.

The action establishes the commission as the price-setting agency, but federal legislation must still be enacted to remove Southern Nevada dairies from the milk order. Sens. Richard Bryan and Harry Reid, D-Nev., are monitoring the legislation, which is in the form of an amendment attached to a farm aid package.

Because the legislation is linked to an appropriations bill, state officials are confident it will be approved. Jennings told commissioners the bill was supposed to be debated this week, but the Senate adjourned when Washington braced for Hurricane Floyd.

Meanwhile, other milk-pricing legislation is on hold as well. Farmers came out overwhelmingly in support of the Department of Agriculture's revised milk-order plan, but critics said they voted for a referendum on the issue because it was preferable to taking no action which, in effect, would deregulate the industry.

Because farmers are unhappy with the Agriculture Department's plan, dairy-state lawmakers have introduced bills that would reinstitute the Depression-era system.

Jennings said whether lawmakers adopt the revised Agriculture department plan or the old milk order system, Southern Nevada would bow out as long as the amendment to the farm aid bill remains intact.

Following approval of the amended state regulation, commissioners agreed to a set price Anderson Dairy will pay farmers per 100 pounds of milk. The price is $1.40 above the Department of Agriculture's minimum price for Class III dairy products. Class III products are among the least expensive and include butter, cheese and nonfat dry milk.

The Dairy Commission staff arrived at the $1.40 differential by computing a formula finding a midpoint between differences paid by Anderson Dairy and Great Basin Federal Order dairies over the past year.