Milk pricing system needs to change

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Editor:

In these times of plunging milk prices, it must be remembered that traders on the Chicago Mercantile Exchange who are driving down milk prices to dairy farmers nationwide are real people with real names and real motivations. There is more involved here than just the economy.

This reminds me of a quote by Kenneth E. Boulding, ag economist at the University of Michigan and member of the Research Advisory Board for the Committee for Economic Development. He said, “The only way I know to get toothpaste out of a tube is to squeeze, and the only way to get people out of agriculture is likewise to squeeze agriculture. If the toothpaste is thin, you don’t squeeze very hard, on the other hand, if the toothpaste is thick, you have to put real pressure on it. If you can’t get people out of agriculture easily, you are going to have to do farmers severe injustice in order to solve the problem of allocation.”

Dairy farmers will be forced out of business in order to “clear the market” while everyone else in the dairy food chain will maintain their margins and the likes of Jerry Kozak and Rick Smith will retain their high salaries. Retail prices for dairy products will probably remain fairly high, thus not sending a clear signal to consumers that there is really any oversupply.

Cooperatives Working Together will likely slaughter more cows, even as dairy cattle are imported from Canada and a stronger dollar is sure to spur more dairy imports. All of this fits into the agenda of free trading globalists who have figured out a way to greatly increase their wealth by stealing the equity of voiceless farmers and why not? What few regulators that are left seem to go out of their way to ignore corruption in the dairy industry. Even the U.S. Department of Justice ignored thousands of pages of evidence against key players in the dairy industry.

The Federal Milk Marketing Improvement Act of 2007 would have provided a fair and stable milk price from the marketplace to dairy farmers. This bill also had a supply management provision which would be working today if demand has really dropped off as much as some claim.

The secretary of agriculture could reduce payment to dairy farmers up to 50 percent on up to 5 percent of their production. This money would then be used by the Commodity Credit Corporation to purchase dairy products to distribute to those in need. Dairy farmers would receive the full fair price for the other 95 percent of the milk that they produce.

This makes good sense, would not cost the government money, and would add real stability to our dairy farms and rural communities.

Power to establish milk prices must be taken away from speculative traders on the CME and be replaced with a pricing system based on total economic cost of production with supply management. The agricultural infrastructure of our nation will be destroyed if we fail to do so.

Gerald Carlin
Meshoppen, Pa.

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5 COMMENTS

  1. If you keep making a profit you won’t cut output. This drastic drop in price will take care of overproduction, one way or another. If milk would go to 8 bucks it would happen even faster and no goverment needed. I have run a grazing dairy 21 yrs and never ended a yr without more money in my pocket than I started with. Dairy programs are really to insure a steady supply of milk at a cheap price to the 99.9999 percent of the people who don’t own a cow.

  2. >This drastic drop in price will take care of overproduction, one way or another

    Mostly killing off the small farmer in favor of factory farms or imports. If there is truly an overabundance of dairy commodities then why has the price of milk, cheese, etc gone up in our local markets? Maybe if they implemented quotas like they have in Canada there would not be this constant rollercoaster ride.

  3. I am an individual that is very interested in starting a dairy in West Virginia. I agree very strongly with what was said here. It seems to me that the man that does the work (the Dairy Farmer) keeps getting shut down, and the middle man keeps getting richer. It doesn’t make any since to me that the dairy farmers pay gets smaller but yet the dairy products in the store either hold steady or increase. There is something wrong with this picture, and something needs to be done.

  4. Dairy farmers get into trouble because they go what the big Ag and Big Dairy tell them and hence are largely controlled by that system. Dairy farmers who convert to the natural and sustainable methods of production and offer their raw milk to the local customers, they profit far more and the customers improve their health alot and the local economy is boosted. See http://www.wholefood.meetup.com/165 and the link above for more info on this.

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