WASHINGTON — The Dairy Subcommittee of the National Family Farm Coalition hosted a press teleconference outlining the dire crisis in the dairy industry due to an unprecedented $5 drop in raw milk prices for February.
Farmers from across the country testified these were the worst conditions seen in decades while Food and Water Watch, a consumer advocacy group, warned lower prices to farmers had yet to help consumers at the grocery store and the loss of family farmers could lead to a dangerous dependence on foreign imports for our dairy needs.
National Family Farm Coalition sent a letter to Congress requesting emergency relief in the stimulus package. The coalition believes the root of the problem lies with a flawed pricing system and a highly consolidated dairy industry and not overproduction, as commonly assumed.
“These are the worst conditions we have ever seen with our income dropping by over 50 percent from a year ago. Now we have only a fraction of the farmers we used to have, so losing even a small percentage will cause more of a depression in rural economies, with possible food shortages and higher consumer prices and forcing us to rely on imports.
“Congress doesn’t seem to care, and neither do our dairy cooperatives and other dairy lobbying groups,” said Paul Rozwadowski, a Wisconsin dairy farmer and chair of the National Family Farm Coalition Dairy Subcommittee.
John Bunting, a New York dairy farmer, placed the blame for volatile milk prices on the fact milk prices are set by the Chicago Mercantile Exchange, which has been exposed as being highly prone to manipulation by a few corporate entities.
“Kraft is one of the lead players in setting the price on the Chicago Mercantile Exchange and they just admitted they sold less product, but made more money due to raising prices to the consumer. We need to investigate the Chicago Mercantile Exchange as the lead player in dropping prices to farmers,” Bunting said.
Bunting further noted milk supply in the country was not driven by price, but factors such as real estate prices in California.
“From 2002-2007, 33 states produced less milk per capita. The handful of states where it increased was due to farmers selling out in California and buying land in places such as New Mexico and Colorado and also Dutch dairy farmers buying farms in the Midwest,” he said.
Bryan Wolfe, an Ohio dairy farmer, noted the consolidation of the industry, particularly the power of Dairy Farmers of America, the nation’s largest dairy cooperative, and how this has led to failures in the pricing system.
Joel Greeno, a Wisconsin dairy farmer, further reiterated how the dairy cooperatives and National Milk Producers Federation have failed to advocate on behalf of farmers.
Greeno also pointed out the MILC program is “grossly inadequate and allows processors and industry to let the price fall and at taxpayers expense, give a pittance to farmers.”
Patty Lovera of Food and Water Watch said rarely do lower prices paid to farmers translate to lower consumer prices at the grocery store.
“We don’t think consumers benefit from this drop in price. Last year, it was widely publicized food prices went up but long term, from 1998-2007, dairy farmers share of the consumer dollar decreased by 25 percent while retail prices went up 40 percent.
“The bigger issue for consumers is what happens when we have no regional and local food supply and have to worry about what replaces that — including possibly imports from China, where you have concerns about the melamine scandal. We’re more vulnerable to that every year we lose more dairy farmers.”