Deadline approaches for CWT bids

ARLINGTON, Va. – Cooperatives Working Together, the dairy industry’s new voluntary, producer-funded effort to strengthen and stabilize farm milk prices, has begun accepting farmer bids for participation in the herd retirement and market reduction programs.

Bid deadline is Aug. 22.

“Dairy producers are eager to get this historic initiative underway in order to improve the return they receive for their milk,” said Jerry Kozak, National Milk Producers Federation president and CEO.

Highs and lows. America’s dairy farmers have been faced with a prolonged period of unfavorable economic conditions, with farm level milk prices reaching 25-year lows this past spring.

CWT will use the proceeds from a 5 cent per hundredweight assessment on participating producers’ milk output – starting with their July production – to implement a multi-dimensional program to reduce milk supplies by 1.2 billion pounds.

The money raised by the program – estimated at $60 million over 12 months – will be apportioned among three supply reduction programs.

The three include a herd retirement program, a milk production reduction program, and a dairy product export assistance program.

“By offering all three programs, CWT gives us maximum flexibility, both with respect to the choices available to farmers, and in consideration of changing market circumstances,” Kozak said.

“And, we’re going to stay with our initial plan to make 45 percent of the milk supply reductions through herd retirements, 10 percent through other marketing reductions and 35 percent through product exports.”

Allocation. The remaining 10 percent will be allocated among the previous three programs as conditions warrant.

Because of recent improvements in the wholesale price of cheese and butter, plans are to implement the export program later in the 12-month CWT cycle, when such export activities will be most effective for producers, according to Kozak.

He said that the two programs in which individual producers can participate will begin immediately.

Deadline. Bid forms for the herd retirement and production programs are available to farmers, and completed forms must be received or be postmarked by Aug. 22.

Successful bidders in both programs will be announced on or about Sept. 12.

The herds of the accepted bidders in the retirement program are expected to be liquidated by mid to late October.

Other program. The reduced production marketings program, meanwhile, will begin its first quarter Oct. 1, and run through September 2004.

“We’re very excited to get these programs underway. Dairy farmers have been struggling under crippling conditions for too long. But producers now have a mechanism allowing them to have some control over their own destinies without expecting or needing government involvement,” Kozak said.

Further details regarding the implementation of these three programs, and bid application forms are available online at www.cwt.coop and through participating cooperatives throughout the country.

In order to be eligible to participate in the bidding process, producers must either belong to a cooperative fully supporting CWT, or have submitted an independent producer membership application in CWT.