Fees for dairy businesses still up in air
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HELENA — Montana dairy businesses were left on edge as an Economic Interim Committee hearing drew to a close. Without a solution or timeline to proposed fee increases, no clear answers emerged from the meeting of invested stakeholders. The fees would support the Department of Livestock’s $130,000 budget deficit and would impact dairy producers, processors and distributors across Montana.
Public hearings were held by the DOL Dec. 17 and Jan. 28 to work out a fair solution to address the deficit. No consensus could be made between the dairy businesses and the department so it was sent to the Economic Interim Committee on Feb. 4 to discuss the best way to move forward.
Dairy businesses big and small say the fees are unreasonable and will drive them out of business, push them to purchase milk outside of Montana, or prevent them from even opening their doors.
Fees as originally proposed started at a minimum of $725 and went to a maximum of $2,850 per month per business, depending on the size of the operation. Fees for every 100 pounds of milk sold were also due to increase.
In the past, fees for inspections had only been charged to farm operations, rather than processors such as cheese and ice cream makers. Many businesses have never had to pay the fees to inspect their milk. All the businesses agreed that a fee should be paid, but that the amounts proposed were disproportionately high.
Wilcoxson’s Ice Cream President Matt Schaeffer said the company had been in business for 104 years and that the proposed fee increases would cost him more than $17,000 a year, after previously paying nothing. He said he could purchase milk from Idaho for much cheaper, which would create a one million gallon surplus of milk in Montana.
“This additional fee is huge. You’re going to run business out,” Schaeffer said.
Wendi Arnold of Flathead Lake Cheese in Polson said that if she had the additional money that the DOL was requesting on hand, that she’d have another employee by now.
“My biggest frustration are the numbers. Paying a fee is one thing but an astronomical fee is something else,” Arnold said.
Lark Gilmore of Poor Orphan Creamery runs a sheep dairy in Sheridan and said that if the proposed fee were allowed to go through small dairy businesses would be discouraged to open at all.
“If this fee increase is allowed to go through, you will encourage only big farming in Montana,” Gilmore said.
At the suggestion of Gilmore, Senator Tom Facey of the Committee asked DOL Administrator George Harris why the budget deficit had ballooned from just $16,000 the year prior to a projected $130,000 for the current fiscal year.
“Why the shortfall?” Facey said.
Harris said that the deficit was caused by a decrease in bigger dairy producers and an increase in staff. He said that when the start of the deficit began, not all staff positions had been filled and now they were.
John Scully, the DOL Vice Board Chair was unsure of a fair solution to the deficit.
“It is very unlikely we will have a short term solution. We have a decline of big producers and an increase in small producers,” Scully said.
Committee members questioned that if the deficit was indeed caused by a decrease in operating dairies and businesses, whether raising fees that would further burden the shrinking industry was the correct answer.
Committee members ultimately voted 6-2 to leave the negotiation in the hands of the Department of Livestock, the leadership of a newly hired Executive Director, and the affected dairy businesses to work out at fair solution.
