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Dairy farmers like Wayne Frye are caught between rising prices for feed and fuel and low prices for milk.

"This year is the most trying -- with (low) milk prices combined with the higher fuel bills," said Frye, 53, of Salem, Westmoreland County, who is a third-generation farmer. He has 240 cows on his farm near Crabtree.

Help could be coming for some of the state's 8,500 dairy farmers, depending on a Pennsylvania Milk Marketing Board hearing on Oct. 31 in Harrisburg.

The three-member board, which regulates the state's dairy industry, will hear testimony on possible changes in a state-set premium paid to farmers above the federally set minimum price of $15.34 for 11.6 gallons of milk processed and sold as milk in Pennsylvania. The board will also decide whether out-of-state processors should pay the premium too, which they don't have to pay now.

Currently, farmers receive a state-set premium of $2.07 for their milk on top of the federal minimum price. That's up from August 2004's premium of $1.40, but not enough to offset a cut in federal minimum that was $18.32 for 11.6 gallons two years ago.

The board typically makes a decision within 30 days to 45 days, said John Howard, a board attorney.

The minimum retail price for whole milk in the region was $2.94 a gallon last month.

At the Greater Pittsburgh Community Food Bank, CEO Joyce Rothermel is concerned action that would raise milk prices could hurt clients.

"We're concerned about anything that seems to be a necessity increasing in price while poverty is rising. With the cost of heating fuel rising ... people are slipping" toward the poverty level, Rothermel said. Even so, she said she is concerned that dairy farmers get a fair price as well.

"The milk prices are down, and there are very few farms that are profitable now," said Edward Gallagher, vice president of economics for DairyLea Cooperative Inc. of Syracuse, N.Y., which buys milk from eastern Pennsylvania farmers. "Dairy farmers are facing their most competitive price-cost challenges."

The Milk Marketing Board is looking at the state premium because "Pennsylvania's dairy farmers are being paid $3 to $4 (per 11.6 gallons) under the cost of production," said Mark O'Neill, a spokesman for the Pennsylvania Farm Bureau, which represents 40,000 farms.

The board was created in 1934 to protect farms and milk processors from price wars during the Great Depression.

"It ensures that the dairy farmer gets a reasonable price, and the consumer is not paying a price that is exorbitant," said Beverly Minor, a former milk board chairwoman, who with her husband, Sam, have 200 cows on their 400-acre SpringHouse Farm in Eighty Four, Washington County.

Out-of-state milk processors are not required to pay the premium on Pennsylvania milk, but they typically pay farmers extra to secure a supply, said the milk board Chief Counsel Douglas Eberly.

United Dairy Inc. of Martins Ferry, Ohio, pays Pennsylvania farmers extra. About one-half of the milk processed at its Martins Ferry plant comes from Pennsylvania, said Tom McCombs, milk procurement manager.

"We have to keep up with the competition," McCombs said.

Still, requiring out-of-state processors to pay the state premium to Pennsylvania farmers "would be a desirable result" of the hearing, said Carl Herbein, a Reading accountant who represents the Pennsylvania Association of Milk Dealers.

While the premium adds income to the farmers, it makes Pennsylvania milk prices higher than in other states, Herbein said. Market pressures, not a state board, keep milk prices lower in Ohio, West Virginia and Maryland.

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