The decision follows a Dec. 3 public hearing and was finalized in the PMB’s Dec. 17 Official General Order A-1022. The Board said its action reflects both near-term economic pressures on dairy farmers and longer-standing concerns about the way OOP costs are borne by consumers but only partially received by dairy farmers.

In its findings of fact, the Board cited testimony from Pennsylvania State Grange President Matt Espenshade, Pennsylvania Farm Bureau dairy chair Paul Hartman, and Pennsylvania Agriculture Secretary Russell Redding as “credible and persuasive” in support of maintaining a $1.00 OOP in the near term.

Espenshade, a Lancaster County dairy farmer, testified about declining milk prices, higher purchased feed costs driven by forage shortfalls, and broader inflationary pressures affecting farm expenses. Hartman, a Berks County producer, echoed these concerns, emphasizing uncertainty around forage availability and a sustained downward trend in milk income.

Secretary Redding testified that while the Department did not oppose the Grange proposal, its non-opposition should not be interpreted as acceptance of the status quo.

According to the Board’s findings, Redding stressed the need for fundamental reform of how the OOP dollars are imposed, collected, and distributed.

“We find that we should consider consumers when establishing the over-order premium,” the Board wrote in its decision. “We find that an over-order premium of $0.50 per hundredweight for April, May, and June 2026 strikes a better balance among the various segments of the dairy industry.”

Under Pennsylvania law, the OOP is incorporated into minimum wholesale and retail prices for Class I milk, meaning consumers pay the entire premium at the retail level, no matter where the milk came from, where it was bottled or produced, yet the premium is only passed back to farmers when a straight-line-linkage can be verified that the milk was produced, processed, and sold in Pennsylvania.

Furthermore, cooperatives are considered “producers” so they receive the OOP with the right to distribute to their farmer-members as they see fit.

The Board acknowledged longstanding concerns that while consumers pay 100% of the premium, producers receive only a portion due to cooperative pooling, transportation costs, and other distribution mechanisms.

“There are 13 million consumers in Pennsylvania,” the Board noted. “While those Pennsylvania consumers pay the entire over-order premium, Pennsylvania producers only receive a portion of the premium.”

The order passed with a dissenting vote from Board member Jim Van Blarcom, who argued the OOP should be set at $0.00 immediately.

“This is the 7th consecutive order in which I’ve disagreed with the majority’s decision to establish an over-order premium at a level other than $0.00,” Van Blarcom wrote in his dissenting opinion, noting his first dissent dates back to January 2023. “No evidence has been presented at any of the six subsequent hearings that any of my concerns with the over-order premium have been addressed.”

Van Blarcom sharply criticized what he described as a system that is unfair to both consumers and dairy farmers.

“The current system establishes a producer price that is paid entirely by consumers but is not entirely received by producers,” he wrote. “Secretary Redding was absolutely correct when he testified that every consumer is asked to pay the premium and every farmer should benefit. It really is that simple.”

He pointed to repeated testimony and multiple legislative attempts over the past four sessions aimed at reforming the system, arguing that inaction by both the Board and the General Assembly has allowed the inequities to persist.

“Knowing the adverse impact on consumers in the form of higher prices, and the adverse impact on producers in the form of an incomplete and inequitable pass through of the over-order premium, the Board will approve yet another six-month over-order premium order, while the legislature continues to not act,” Van Blarcom wrote.

“In the meantime, Pennsylvania’s 13 million consumers will continue to pay higher prices, farm numbers will continue to decline, and Pennsylvania’s dairy infrastructure will continue to age,” he stated. “The system is so flawed that I cannot approve it continuing, even in the modified fashion approved by the majority.”