By SUSAN MYKRANTZ
Ohio Correspondent

MT. HOPE, Ohio — For many years, the dairy situation is a lot like the weather, everyone talks about it, but no one does anything about it, or at least until about five months ago when more than 500 dairy producers and agribusiness people attended an informational meeting at Charm, Ohio.

From that meeting, a group of dairy producers in Wayne, Holmes and Tuscarawas counties came together to discuss the situation and find a solution. In January, that group joined forces with the Dairy Policy Action Coalition (DPAC) out of Pennsylvania to identify challenges facing the dairy industry and find workable solutions to the problem.

On a cold, foggy Feb. 22, producers met in the Mt. Hope Auction barn to talk about the weather and get an update on the progress DPAC had made on the dairy situation.

Alan Kozak, chairman of the local group and a charter member of DPAC explained that Dennis Wolff, a dairy farmer up until the time he assumed the position of Secretary of Agriculture for the Commonwealth of Pennsylvania, had been hired, along with Versant Strategies to pull the group together and help them sift through the information they had gathered over the past several months. Versant Strategies is unique because as a public affairs firm, they specialize in agricultural issues.

“Every dairyman on the board is passionate about being on the board,” he said. “But they feel like if they don’t do something about the problem, no one else will.”

Kozak added that the processors and co-ops in the area have good programs in place for their producers, but when it comes to dairy policy, it takes a different approach.

“Something has got to change,” said Kozak. “Are we going to let someone else change it or are we going to work on finding a solution. We want to know what dairy producers think and what they want us to do.”

Wolff explained that during their discussion, DPAC members identified several areas of concern; specifically is the Federal Order System working, is it transparent, is there a good price discovery system in place in the market and how to handle the volatility of the market.

Wolff said that there is discussion of a supply management program, but that is secondary to finding solutions for the main issues.

He said that there are components of the current farm bill that need to be activated for the benefit of dairy producers, First, an electronic reporting system needs to be put in place to provide more frequent price reporting and audits.

“Current price reports are two weeks behind,” Wolff said. “When you compare that to the daily or even hourly reports of other commodities, it is definitely an issue. The market can’t reset itself without a feel for what is going on.”

Heading into the 2012 Farm Bill, one of the changes DPAC would like to see is a change in the price support program. Currently when milk prices hit the floor price of $9.90, the government buys excess powder and cheese products and puts it in storage. This hurts dairy farmers because the supplies don’t go off the actual inventory list. DPAC would also like to see more products reported such as Swiss Cheese, cottage cheese, yogurt and Italian Cheese reported. Cheese makers would also like to see prices reported on more types of cheese. Currently prices are reported on only a handful of products and four classes of milk, Class 1 or fluid milk and Classes 2-4 or manufactured milk.

Processors follow the make allowance prices, but this doesn’t always mean that the milk goes for the highest and best use.

Wolff acknowledged that the issue is cloudy with the current federal order system, but changing the system would make things better for dairy farmers.

Wolff added that the group is working with the dairy economists from four land grant universities to explain the dairy issues and he assured them that DPAC wants to make sure that the decisions they make will move the dairy industry in the right direction.
Wolff added that DPAC also wants the USDA to implement the 7.5 cents per hundredweight assessment on imports as stated in the 2008 Farm Bill and is opposed to expanding trade with New Zealand and Australia as it would have a negative impact on U.S. farmers.
Wolff told the group that as a dairyman, he knows what it is like to try to pay bills in the situation they are in.

“Elected officials realize that the dairy economy is important,” he said. “We have gone in with the message that we have a solution.”