Proposed fee increases may affect dairies, small businesses
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MISSION VALLEY—The Montana Department of Livestock has proposed significant fee increases to dairies and other small processors, which could potentially affect many businesses in the Mission Valley and throughout the state.
The fees would specifically affect those businesses that are licensed with the Milk and Egg Bureau and is proposed as a way to make up for a $130,000 budget deficit that the department is predicting for the upcoming year.
The Department has proposed new fees starting at a minimum of $750 to a maximum of $2,850 per month, per business, depending on the size of the operation. They have also proposed increasing the already established fees that are charged for every 100 pounds of milk sold from 16 cents to 28 cents. Some increases are not expected to be permanent, such as the hundredweight fees. This would potentially affect 72 businesses in Montana.
Dan and Della Daugherty of Daugherty Dairy in Charlo have operated their dairy for the past 28 years. As a small farm, they have somehow survived the near static growth and consolidation of the industry. According to them, it has been the dairies that have been financing the inspections required for all associated small business. Processing facilities, such as creameries, have not had to pay these fees. While the Daugherty’s fees for testing will almost double, they say they are used to paying the department. They are sympathetic to the small businesses that this fee increase will affect, but they believe that small dairy processors should hold some responsibility for the cost.
“The pain should be spread around. This is the dairyman’s alternative to paying for everything,” Dan Daugherty said.
Daugherty offered a brief background of the fees dairy producers paid to the Department of Livestock. Historically, the state of Montana paid for the fees required for the testing of fluid milk to ensure public safety. After World War II, the state legislature planned to cut the budget for the diagnostic lab, a much needed service that the dairy farmers depended on to keep the dairy processors honest. The farmers came together and offered to finance the resources needed to continue their operations. At that time in Montana, the dairy industry was thriving. According to Daugherty, in the ‘70s and ‘80s, Lake County had more than 70 licensed dairies; that number is now four. The Flathead Valley has only one left and the Bitterroot Valley has only two. This means there are less operating dairies to help pay for the Department of Livestock’s services.
Daugherty believes the solution to the funding issue is to have a general fund that pays for the services through another department that is concerned with public health and safety.
The potential unplanned expense of the fees could be burdensome to Wendi and Joe Arnold, owners of Flathead Lake Cheese in Polson. They haven’t had to pay anything for inspections, other than the general fees associated with their licenses.
“I understand a need for fees, but it needs to be more balanced. It seems like a lot to pay for two inspections a year. It’s painfully surprising. These fees will not encourage small dairy businesses to start up,” Wendi Arnold said.
To a start-up creamery like the Golden Yoke in St. Ignatius, these fees will be especially burdensome. Owners Laura Ginsburg and Connie Surber have been working to open their ice cream shop in early 2016.
“These fees will be a large portion of our income. What has been really unclear is how the Department of Livestock came up with the numbers; I’m not sure it actually equates to the worth,” Ginsburg said.
Currently there is no dairy representative on the board of the Department of Livestock, which is also worrisome to Ginsburg.
Comments were requested from the Bureau Chief of the Department of Livestock, but were not received by press time.
The changes to the fees were released Nov. 12, and were to be voted on Dec. 1. The new fees were to be swiftly enacted starting Jan. 1, 2016, without a public hearing scheduled. According to the ruling, seven representatives were needed from potentially affected businesses to prompt a hearing. On Nov. 23, representatives from Kalispell Kreamery, Poor Orphan Creamery, Wilcoxson’s, Flathead Lake Cheese and other dairy businesses stated their concerns to the Department of Livestock and requested a public hearing. That date has yet to be announced and enactment of the new rules has no clear start date.
