By State Representative - Paul Anderson

Wednesday, July 22, 2009

When the sales tax increased July 1, and with the proceeds from the 3/8’s of a percent increase slated to go for the environment and the arts, several constituents asked about the other revenue stream for the outdoors in Minnesota, namely the State Lottery.  When it was first pitched to us, we were told the proceeds were to go for environmental projects.

After doing some research into the subject, it was learned that 60% of the proceeds from lottery sales go for the prizes awarded to lottery winners.  About 8% goes for the administration of the program, while another 6% is taken up with commissions to the retailers who sell lottery tickets.

The remaining 25 cents of every dollar spent goes to the state, of which approximately 14 cents goes into the general fund.  The remaining 11 cents goes for outdoor purposes, such as the Environment and Natural Resources Trust Fund, along with game and fish, and parks, trails, and zoos.

I had the opportunity to observe a modern dairy operation last week as we toured the Steve and Lisa Groetsch family farm just north of Albany. It was a picture-perfect Minnesota morning as I made my way up their driveway, with a nice rain shower the night before making everything fresh and lush.

Steve and Lisa were excellent hosts.  We toured their parlor where 14 cows can be milked at a time.  We walked through their freestall barn, where the 175 cows in the milking herd spend most of their time.

A highlight was seeing their new calf barn, completed just last year. It features a computerized system that actually feeds milk replacer to their young calves.  Each calf wears a belt around its neck and, when one steps into the feeding station, a computer chip in the belt tells the system how much and how often each particular calf gets fed.  Water and powder are automatically mixed as the calf goes to work and enjoys a meal.

The dairy industry is hurting.  Farmers have seen the prices they receive for their product cut in half from just one year ago.  The Class III price of milk in June of ’08 was over $20 per hundredweight. This year, the price is hovering around the ten dollar mark.

Making matters even worse, input costs have not come down correspondingly.  Recent cash flows done by Farm Business Management instructors show that producers are losing around $100 per cow per month with current pricing.

We were told that with the current world economic situation, demand for our dairy exports has dropped.  With a surplus of product on the market, prices have plummeted.  One source predicted it would be 2010 before prices start to rebound.

Those on the tour expressed frustration with the current pricing for milk.  With the amount of expertise, hard work and capital required to operate a dairy farm these days, to go through all that effort just to lose money is understandably difficult to take.

Dairying is very important to the state, as well as our local, economy. Stearns County leads Minnesota in the production of milk and is home to around 700 dairy operations and 65,000 cows.