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Americans this summer have been eating more ice cream. And, convinced that butter is no less healthy than substitute spreads, they have been buying butter again -- at least until its price soared. At the same time, milk production has dropped in regions where heat and rain have been excessive. In other words, the long pleasant (for most people) summer has demonstrated that the supply-demand factor still works, especially in the dairy industry. The result has led to an unprecedented butterfat shortage -- butterfat or cream is the main ingredient of ice cream, cheese and, of course, butter.

The butterfat shortage has boosted prices of all milk-based foods. And because cheese prices are factored into the prices farmers get for their milk, wholesale and retail class I (drinking) milk prices have shot up. In August they rose about 5 cents a quart and in Septembr they will rise nearly 4 more cents.

In September, farmers will be paid $17.07 for every 100 pounds (46.5 quarts) of drinking milk that contains 3.5 percent butterfat. Years ago, to encourage farmers to produce creamier milk, the federal milk marketing system began paying a butterfat differential -- the creamier the milk, the more a farmer was paid. Thus, farmers whose milk has a 3.6 or 3.7 percent butterfat content will get even more for their milk. That butterfat differential in September will be 22.3 cents per hundredweight, an all-time high.

Processors' demand for cream (butterfat) is so strong that ice cream makers in other regions have been asking Western New York producers to sell them cream. On top of that, milk processors must pay 20 cents more to cover dairy advertising. In rough terms, September's $17.27 per hundredweight price of drinking milk will bring New York dairy farmers about 37 cents a quart, nearly 4 cents more than they are getting this month and nearly 9 cents more than they were paid in July. The high prices are expected to last for a few months.

There's a political aspect to the butterfat shortage and milk price rise. September milk prices in New York will exceed the price paid to New England farmers through their Northesst Interstate Dairy Compact. That may chill the urge for New York to join the price-setting compact or make it easier since the higher retail prices are the result of natural supply-demand forces.

With the harvesting of early-maturing apples well along in what has proved an early season, New York apple growers will have to rely more than ever on offering quality apples to consumers. The estimated 1.04 billion pound crop, about 25 million bushels, is described by the State Agriculture Statistics Service as an average size. Frost and hail damage are blamed for limiting the crop size.

New York apples will have plenty of competition. The nation's crop is put at 11.3 billion pounds, up 9 percent, with Washington state expecting a 6.1 billion pound harvest, up 22 percent.

Successful Farming magazine says that farmers in 11 surveyed states (New York was not among them) showed that farm profits fell 47 percent last year, reaching a decade-low point. Can they be any better in 1998 with all the bad weather hitting growers from coast to coast?

To help sustain the industry, Congress has approved sending all of this year's flexibility payments to eligible farmers in a single payment in October and has invited farmers in weather-stricken regions to apply for federal aid and low-cost loans. Farmers in Erie, Cattaraugus, Steuben, Niagara, Orleans and Wyoming counties, as well as those in six northern New York counties, have been helped with as much as $10 million in recovery aid.

Barnyard gossip: United States Department of Agriculture researchers are developing a new formic acid gel for beekeepers that can repel deadly Varroa mites that become resistant to Aphistan. . . Gina Brown of Machias raised the grand champion steer at the Cattaraugus County Fair. It weighed 1,225 pounds, and Erie-Niagara Insurance of Williamsville bought it for $1.85 a pound. Brandon Blesy of Springville raised the 127-pound grand champion lamb that Gramco Feed Mill of Cattaraugus bought for $4 a pound. . . . Sustainable-farming advocates are disappointed that the USDA's 1999 budget lists no funds for this type farming. . . . USDA plant breeders credit the rising popularity of cantaloupes, or muskmelons, for a better-flavored product. . . . The Northeast Organic Farming Association has certified a total of 12 organic farms in Allegany, Cattaraugus, Erie, Genesee, Livingston, Monroe, Niagara, Orleans and Steuben counties. For a list with products and telephone numbers, write to the NOFA-NY Certification Program, 20 Towpath Road, Binghamton, N.Y. 13904.

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