Dear Editor,

As a dairy farmer for more than 50 years, I have seen my share of milk price cycles. We have seen various government programs, farm group protests and export enhancement programs to address low prices.

The latest program was developed by National Milk Producers Federation and was partially adapted into the last farm bill. Pressured by producers and some farm organizations, it contained a form of supply management to maintain prices at a sustainable level.

Congress, lobbied extensively by manufacturers and processors, failed to include the supply management provision and replaced it with a revenue insurance plan that has been totally inadequate. The result has been a flood of increased production and lower prices.

When we began seeing this increase in production, couldn’t NMPF have instated its own supply management, with the government failing to have done so? Perhaps the answer is NMPF’s willingness to side with the same lobbying groups that fought supply management and are trying to fix the margin insurance that failed. There aren’t enough taxpayer funds to do so.

Low prices in 2009 caused producers to prod NMPF into admitting the only way to establish and maintain fair prices was to regulate production. As soon as serious discussion began, milk prices started rising. By the time their program was to be included in the farm bill, we were receiving record high prices for milk. Who needed supply management? I wonder if the timing of these events was mere coincidence.

Many producers listened to industry market experts and expanded production to meet growing world demand. These same experts knew Europe was dropping its quota system and increasing production to decrease its dependence on imports, as well as gain back export markets. They also knew New Zealand wanted to regain Asian markets it had lost because of a recent drought.

How many times when prices reach profitable levels have producers responded by increasing production a few percent, only to see prices drop 30 percent or 40 percent? What do we gain by being good herdsmen and such poor industry-view businessmen? We complain about the price of new machinery, pickups and gas, but these prices are maintained by balancing supply with demand.

More milk is being produced on larger farms, often locating in areas that cannot handle the extra production. This causes milk to be displaced, often from smaller, established farms. This milk has to be hauled greater distances at higher costs to markets that often do not need additional supplies.

Not only is this milk often sold at distressed prices, but it also pulls down market prices for normal supplies. If this race to the bottom continues, the only survivors will be dairies forced to integrate with buyers. Many of our larger co-ops, to assure market access, have formed alliances with processors at prices set by the buyer instead of negotiations in competitive markets.

These changes in market conditions are caused more from increased production on large farms than from the family farm that supported supply management.

Most family farms exist not just as a business, but as a place to raise a family and be an integral part of the community. Since many have been in operation for generations, they are mindful of environmental concerns and strive to be good neighbors. These are the size of farms that existed when co-ops were developed and organized under Capper-Volstead. Each member had one vote, regardless of size.

If members utilized this fact, many of the inequities that have resulted from the huge difference in individual producer’s size could have been avoided.

We can’t change the past, and if present conditions continue, we will keep losing family farms.

Have we reached the point where so much of our production comes from the large farms that are labeled too big to fail? When milk prices are too low to pay the bills, do they just get integrated with the buyer? How do we compete with this?

If our family farms are to survive, they need a price that covers expenses and gives them a fair return on investment. There are still processors and buyers who want to continue in business, which have many of the same concerns as these producers. We know there are many consumers who care where their food comes from, and are willing to pay more for that knowledge.

Our family farms’ future lies in partnering with processors and consumers who see the benefits of that cooperation.

In the past, we have protested and demonstrated for better and fairer prices. We are now possibly fighting for our very survival and welfare. If you believe that the only future in dairying is the large mega-diary, you might be able to stay in business by being what I call a janitor in your own barn. If you are willing to accept the status quo, you can exist until you have used up your equity. Because no one can afford to buy your operation, it will then cease to exist as a family dairy farm.

If you are not ready to give in, now is the time to join together and demand your co-op represent you and your neighbors, instead of tanker loads of milk. Instead of giving away milk at below cost of production, maybe that milk should be disposed of. How much milk is disposed of, and who gets paid for milk that is sold needs to be decided by all producers.

We know what production was needed before the bottom fell out of prices. We also know where the milk that caused the problem comes from. For our industry to survive, for family farms to survive, we must do as other industries, and manage our supply to meet demand. We must also reward the family size farm that produces the milk that many consumers want.

Why do market advertisers like to represent their product as if it comes from that little red barn that consumers associate with the family farm? It’s time we reward that family farm for its efforts, instead of worrying about some investor’s profits.

To allow demand to set price to set supply will only continue the loss of our family farms. We must do as other industries and manage supply to keep prices at sustainable levels.

Part of balancing supply and demand will be maintaining some inventory of product to ensure some amount of food security. As in the past, I’m sure we will see production glitches caused by natural or man-made disasters. Farms that are profitable will respond to these problems a lot faster than farms existing on life support.

Wayne Prichard

Burlington, Mich.