Tipton Criticizes Connecticut Study

May 9, 2001

E. Linwood Tipton, president and CEO, International Dairy Foods Association, claims a study by researchers at the University of Connecticut on the Northeast Interstate Dairy Compact "is clearly more about politics than about facts." The study's release follows the introduction of legislation to continue and expand the use of interstate dairy compacts and uses "statistical sleight of hand to arrive at what appear to be pre-determined conclusions of the authors," Tipton says.

The study analyzes the impacts of the compact, but "a quick review of the study's key points reveals that the numbers just don't add up," Tipton charges. "The study's authors have mixed methodologies to arrive at the results they want. For example, they conclude that farmers have received an added benefit of $128.5 million as a result of the higher compact price. However, they also conclude that consumers paid a premium of only $19 million due to compact induced higher prices. One has to wonder where the other $109.5 million came from to pay the farmers. The numbers don't add up."

Tipton says the authors conclude that processors paid only 4.5 cents more per gallon for milk because of the compact's minimum price rule. However, a comparison of the compact minimum price with the federally regulated minimum milk prices since July 1997 when the compact went into effect clearly shows a 13.8 cent per gallon difference for the months a compact premium was paid, according to Tipton. "Therefore, the 11 cents per gallon the authors attribute to increased profits for retailers and/or processors is grossly inflated. Again, the numbers don't add up."

The study also makes "unnecessary and disparaging statements about milk processors based on absolutely no data on the wholesale price of packaged milk," he adds. The one thing that is undisputed by the authors "is that consumers have paid more for milk as a result of this flawed policy. This transfer of money from milk consumers to dairy producers particularly hurts families and those living on lower and fixed incomes," Tipton says.