Milk program increases assessment

ARLINGTON, Va. – The members of Cooperatives Working Together voted recently to double the program’s current 5-cent per hundredweight assessment.
They said it is being done in order to accumulate the additional financial resources necessary to address the surge in U.S. milk production that is beginning to depress farm-level prices.
The higher assessment will begin July 1 and run through 2007.
‘Sufficient resources.’ National Milk Producers Federation President Jerry Kozak said that the farmer-funded self-help program “risks being irrelevant in the marketplace if we don’t have sufficient resources to do what farmers expect of us.”
CWT’s current budget does not contain sufficient revenue to fund additional herd retirement rounds, Kozak said.
The higher assessment will bring in the additional money needed over 18 months to continue both the herd retirement program, and the ongoing export assistance program.
“We’ve seen increased growth in milk output recently, with both overall cow numbers, and milk production per cow, reaching significant levels,” Kozak said.
“The additional nickel gives us more money to address the supply situation that is threatening farmers’ prices,” he said.
Kozak said that once the new assessment begins, he expects that the level of overall participation in CWT will remain at the 74-percent level of the nation’s milk supply.
“The more money we are able to collect, the more effective we can be in meeting the goals of our members,” he said.
Other changes. In addition to voting for a higher assessment, CWT’s members also modified several other of the program’s features.
First, the regional safeguard levels in the Northeast, Southeast and Midwest were raised to 3/4 of 1 percent of each region’s annual milk production, up from 1/2 of 1 percent.
Second, whole milk powder was added to the list of dairy products eligible for export using CWT bonuses.
Additionally, Mexico, a major market for whole milk powder, was added to the list of eligible destinations for that specific product.
Third, the target price for cheese under the export assistance program was moved from $1.40 per pound, to $1.30. The target butter price remains at $1.30 per pound.