| Legislator drafts bill to create new milk supply management program |
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The tough times have increased efforts to create a nationwide milk supply management program, according to Dairy Profit Weekly Editor Dave Natzke in his Friday report. Meetings in Vermont and California in the past week each attracted about 200 farmers, industry and political leaders to discuss efforts to control the milk supply and stabilize milk prices, Natzke reported. The California meeting featured Rep. Jim Costa (D-Calif.), who is drafting a bill to establish a mandatory supply management program.
Under a preliminary draft of Costa’s bill, a producer board and the secretary of agriculture would establish allowable quarterly milk production levels for each dairy, as well as a market access fee, based on historical production levels, a milk-feed price index, and other milk marketing factors.
Dairy farmers who surpass their assigned milk production level would have to pay the market access fee on that excess milk, with the money shared with all producers who stay within their assigned production levels for the quarter.
Groups warm up to management program
The nation’s largest dairy cooperative, Dairy Farmers of America, and the Midwest’s largest dairy co-op, Associated Milk Producers Inc., have embraced some form of supply management, according to Natzke, but not any specific proposals. One of the largest dairy co-ops in the Northeast, Agri-Mark, has drafted a proposal of its own, called “marginal milk pricing,” he said, and several other plans have been developed. A University of Cornell study comparing various proposals is expected at the end of May.
But, support of a mandatory supply management plan is not universal, Natzke warned. Opposition is strongest in the Upper Midwest, he said, which is seeing a dairy resurgence and a recent meeting of farmers in Idaho’s Magic Valley found nearly two-thirds opposed a government-mandated supply managed program.
On another policy front, National Milk CEO Jerry Kozak has posed a question on the Federation’s website regarding a “sacred cow” in the dairy industry, if you’ll pardon the pun, namely the dairy price support program.
Entitled “Time for Balance, Not Balancing,” Chris Galen said in Thursday’s DairyLine that U.S. dairy policy will be reassessed in the next year or so. He said that many believe the support program should be eliminated and those government resources devoted to a new income protection program that would provide a better safety net for dairy farmers.
“The price support program has worked well historically,” Galen admitted, “But, I think in the past decade; it has become clear that it’s time for a new approach.” He explained that the program is not being administered effectively and companies often chose not to sell product to the government, particularly cheese, and the product that does get sold to USDA is nonfat dry milk.
“Milk that U.S. farmers produce, rather than being sold commercially either domestically or internationally,” Galen argued, “gets sold to government warehouses where ultimately it does get returned to the market in one way, shape, or form.” National Milk doesn’t think that’s the best way to handle the occasional surplus, he said.
The price support program also acts as a disincentive to product innovation, Galen charged. “We have processing plants that are designed to produce nonfat dry milk simply to be sold, at least sometimes, to the government rather than that milk be processed into things that the market actually wants,” he said, “That’s not the most effective way to conduct business.”
The program also supports dairy farmers around the world, according to Galen, “because other countries, particularly farmers in Australia and New Zealand, benefit from the price protection of our support program.”
Dairy crisis drill preps cooperatives
Two words remain in my thinking process from my short stint in the Boy Scouts, “Be prepared,” a bit of wisdom that has served me well over the years. I thought of that and was reminded of the old “fire drills” we used to have in school as I participated in a “dairy crisis drill” in Seattle, Wash., the last day of March, hosted by Dairy Management Incorporated and the International Dairy Foods Assoc.
There were about 90 participants from several states, made up of dairy processors, state and regional checkoff staff, state ag department people, a Food and Drug Administration official, and three FBI agents and attendees were divided into small groups and assigned to fictitious dairy companies where various titles and job descriptions were given. I was an “imbedded reporter.”
A mock news bulletin reported a large outbreak of Staphylococcus Enterotoxin B and board members discuss the news accounts that soon start pointing to dairy as a possible suspect and, just as the board members were deciding how their company will respond to calls from consumers and the media regarding their company brand the ongoing crisis is escalating.
Several of these “officials” had to face me and media colleague Kate Sander of Cheese Market News in mock news conferences where Kate and I role played as aggressive reporters trying to get the story for our readers and listeners.
Future drills are planned and I’m confident they will drive home the point that, while this is a fake exercise, it was a realistic one. CEOs and board members will have to defend your cooperative and its farmer members in such a situation and I couldn’t help but think how important it would be to have a competent person answering the press’ tough questions, instead of the janitor or a milk truck driver.
The training was tough, intensive but vital in the world we live in today. Thankfully, the dairy industry has been proactive in this area and has a Dairy Communication Management Team in place.
IDFA’s Peggy Armstrong, called it a “terrific day and a great learning experience” in Wednesday’s DairyLine, and said that a lot of strong relationships were built there, which is key to working effectively in a crisis.
“The more you plan and think through what is unthinkable, the better prepared you are,” Armstrong said. “Research shows that the organization that plans for crisis, recovers two to three times faster than one that doesn’t.”
Pennsylvania dairy producer Paula Meabon talked with DairyLine’s Bill Baker about why she is involved with the National Dairy Board at this year’s World Ag Expo in Tulare. That interview aired on Monday and Meabon pointed out that she was asked to serve about six years ago and she readily agreed to.
She said she loves dairy farm living and knows that promotion is an important part of that life and urges farmers to “tell their story” instead of letting the neighbors do it.
“I keep my cows comfortable,” Meabon said, “With fresh feed, fresh water and I want consumers to know that; why would I treat my cows badly. They’re my bread and butter.” “A lot of assumptions are made and bad press can put dairy farming in a bad light and sometimes you have seven seconds to defend yourself,” she concluded. |
| 4/14/2010 |
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