AUGUSTA (AP) – Falling milk prices on the farm and rising prices in grocery store coolers have led some milk producers in Maine to quit the business, state agricultural officials have said.

Just 15 years ago, there were 665 dairy farms in Maine. Today, there are 388. High costs of production have been one problem, said Julie Marie Bickford, executive director of the Maine Dairy Industry Association.

But the continued gap between prices have concerned diary experts. While the price to the farmer has continued to drop over the past three months – falling from about $22 per hundred weight in May to about $3 in June.

Still, milk production rose earlier this year amid rising prices.

“In August, when retail milk was $3.29 to $3.49 a gallon, $1.43 was going to the farmer,” Bickford said. “The public perceives that when milk prices are high, that money is going to the farmer. That’s not where it is going.”

Maine’s congressional delegation has asked for a General Accounting Office study of the market situation. A New York senator also has demanded a Federal Trade Commission study of the price differential to complement his own study.

Sen. Charles Schumer found that in the last three months, consumers experienced increased prices while the dairy farmers were paid less per gallon.

Stanley Millay, director of the Maine Milk Commission, said his study of milk prices this summer mirrors Schumer’s report. But the commission cannot affect the maximum price charged for a gallon of milk in the store.

“The retailers can charge anything they want,” he said. “I think something needs to be done.”

Millay said that prices surveyed last week in Bangor and Augusta showed that skim milk gallons were running 82 cents to $1.02 over the minimum price. That’s profit shared by retailers and processors, not the farmers.

But milk production has remained steady, Bickford said. Maine farmers produce about 60 million pounds of milk a year, which means that even with fewer farms, those still operating have increased production.

“We are still holding our own,” he said.

AP-ES-10-13-04 0942EDT

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