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Dairy exports in 2012 more than triple their 2004 levels
By RACHEL LANE
D.C. Correspondent

WASHINGTON, D.C. — The dairy industry faces an increased opportunity to export products, as well as changes to immigration laws in the coming year.

The February Farm Foundation Forum focused on the needs and challenges facing United States dairy. From changing federal policy to an increasing global demand, the speakers at the forum addressed many of the relevant issues.

In 2004, the United States exported about 4 percent of its dairy product. In 2012, the export figure had increased to over 13 percent. This is, in large part, the result of dairy costs rising around the globe, bringing the average cost of milk, cheese and yogurt inline with the United States said Sue Taylor, vice president of Dairy Police and Procurement for Leprino Foods Co., the world’s largest mozzarella manufacturer.

“We need a 21st century farm policy,” Taylor said.
To update the dairy policies, the federal government needs to encourage global trade; the Trans Pacific Partnership Free Trade Agreement currently under negotiation is touted to help make agriculture available globally.

With increased discussion in immigration policy in recent months, many farmers hope to see positive changes to make it easier to employ workers. Mitch Davis, the general manager of Davis Family Dairies – an operation with more than 11,000 animals, including 6,000 milking cows – said many of his workers are highly trained even if they are not highly educated.

“We have no unskilled activities,” he said.

Deb Erb, co-owner of Springvale Farms and Landaff Creamery, said many Americans don’t want jobs on the farm and would rather work in the creamery than in the field. Davis said the federal government could help farmers out by removing some of the restrictions, specifically regarding animal welfare and environmental concerns.
“Taking care of the environment (and the animals) makes businesses money,” Davis said. Over-fertilizing can ruin the land and runoff from the fields or the equipment sheds will contaminate the water supply and both results would damage the productivity of farms, he explained.

“You have to be a financial idiot to mistreat animals on a dairy farm,” he added.

He said he has regulators from the federal, state, regional and local governments monitoring his farm – and sometimes, several agencies from the same system of government monitoring almost the same thing. The redundancy is unnecessary, he feels.
Mary Ledman, principal of Keough Ledman Associates, has worked with the USDA in its Foreign Agricultural Service and National Agricultural Statistics Service. She addressed concerns of farmers on the policies in place to sell dairy products.

Recent trends show that per capita, there has a decrease in fluid milk sales, the highest grade and most expensive milk, and an increase in cheese, yogurt and other dairy products. The way milk money is currently reallocated, the funds are pooled and then distributed.

Ledman said fluid milk providers tend to earn slightly less than what the milk is worth because funds are used to supplement the other dairy classes. The price of dairy ranges across the country, depending on the availability of milk in a community and the number of people in that region, and the price of milk for one month is set the previous month.

The complicated structure is based on USDA policies, which require farmers to use the complicated formula or not sell the milk, Ledman said. “It’s not transparent,” she said. “It takes at least two years, historically, to make changes to federal policy.”

With recent changes, it may be possible to change policies more quickly, she added, but it has not been tested yet.

Charles Ahlem, a Farm Foundation Roundtable member and one of the co-owners of Hilmar Cheese Co., said he saw the potential for a global dairy market more than 15 years ago. Hilmar Cheese now sells cheese and whey products in more than 40 countries.
“Instead of focusing on what the consumer wants, we’ve been focusing on government policies and staying the same,” he said. He believes new policies are needed to take the focus off the system and onto the global consumer.

Most current policies seem to focus on the agricultural industry as it was in the 1930s, Taylor agreed.

The Farm Foundation organizes monthly forums to engage farmers, educators and legislators in an informed dialogue on agricultural and rural policies. More information on the forum, “The Challenges and Opportunities for U.S. Dairy Policy,” can be found on the foundation website at www.farmfoundation.org
2/13/2013