WOOSTER, Ohio — Dairy producers in Ohio and some from neighboring states made clear the past year they wanted to share their concerns over milk prices with state and federal milk officials.
On March 31, at Ohio State University’s Arden Shisler Conference Center in Wooster, Ohio, they got what they wanted.
“You folks shared what was on your mind; we brought it to you in the form of interaction and dialogue,” said Scott Higgins, chief executive officer of Ohio Dairy Producers Association.
The “interaction and dialogue” included a half dozen presentations from the biggest players — National Milk Producers Federation, Milk Producers Council of California, Dairy Policy Action Coalition and a couple university-stationed dairy specialists.
Multiple plans were presented for correcting the dairy crisis and avoiding a similar crisis in the future, but officials said their plans do not necessarily compete. In fact, many of the different plans could complement each other.
Highlights of plans
Dairy Policy Action Coalition — a producer-based group of mostly Pennsylvania and Ohio dairy producers, is seeking ways to “clean up the system that currently exists,” said its leader, former Pennsylvania Secretary of Agriculture Dennis Wolff.
The farm bill, which will next be issued in 2012, may provide opportunity for policy improvement. But Wolff and his group are working to improve existing policy by seeing that it’s carried out, and some of it, more timely.
Their major focus is eliminating the federal Dairy Price Support Program — a program that establishes federal minimum prices for dairy.
Wolff said it has actually hurt dairymen, by creating a false market and by failing to remove any real product from the inventory, further discouraging the manufacturing industry from investments.
Other focuses include using electronic reporting for dairy products, and increasing the frequency of reports, as well as audits.
Wolff said other commodities are reported on a daily basis, while dairy reports can be as much as two weeks behind.
“In this age of new technology, it’s very insensible to have that type of reporting system that lags that far behind what the market is doing,” he said.
Jim Tillison, of National Milk Producers Federation, cast similar support for changing the Dairy Price Support Program, which currently guarantees farmers $9.90 per hundredweight for milk — a price he said is not relevant for today’s dairy farmers.
“The Dairy Price Support Program frankly reduces demand for U.S. dairy products, and, frankly, damages our ability to export products while encouraging more imports into the U.S.,” he said.
Tillison supported National Milk’s “Foundation for the Future” initiative — a market improvement plan based on increasing the timeliness of reporting market signals, increased efforts with Cooperatives Working Together, and reducing dependence on government programs like Milk Income Loss Contract and Dairy Product Support Program.
One area of disagreement is whether dairymen should embrace a version of the many supply management plans being proposed.
Tillison said the industry is split on the issue, and National Milk continues to monitor it, but has decided not to endorse one of the more popular plans — the price stabilization plan of Holstein Association USA.
However, groups like California’s Milk Producers Council find benefits in supply management and are endorsing a plan similar to the Holstein association called the Dairy Price Stabilization Plan.
This plan charges producers who want to expand, a “market access fee.” The fee is what many are calling “managed growth,” and not a limit or cap on growth.
Robert Vandenheuvel, general manager of the Milk Producers Council, said the market access fee “creates incentives where they (producers) have to manage their growth.”
He said the “booms and busts” of the market are nothing new, but are getting more drastic, with far fewer dairies still in production. Those who remain in business are usually the ones with the most capital.
When to act?
Tillison said whatever happens will need to be “politically and economically viable,” and said it’s likely most reform will have to wait for the 2012 farm bill.
But others say now is the time to act, and if necessary, the farm bill will be the last resort.
“I’m not quite sure I’m ready to say ‘wait until the 2012 farm bill,'” Vandenheuvel said.
He added, “you need to have a call to action,” something he said the country got when its dairies started losing billions of dollars.