Slimmed-down CWT gets go-ahead


SALEM, Ohio – Despite lagging interest, the National Milk Producers Federation launched a scaled-back version of its new voluntary milk program in an effort to boost sagging milk prices.

The lack of interest forced the federation to change participation requirements from 80 percent signup to 70 percent.

Cooperatives Working Together was launched last week, immediately after the federation gave the modified program the green light.

Number game. The most recent version of the program will assess producers 5 cents per hundredweight, rather than the originally proposed 18 cents.

Hopes that milk supplies would be pared by 4.6 billion pounds in 12 months fell short. In the slimmed-down version, milk supplies will fall by just 1.2 billion pounds.

The new, more conservative program aims to give producers a 23-cent per hundredweight jump in the milk check. Originally, the economic impact was estimated to be $1 per hundredweight.

Three aspects. The three-pronged program, first introduced in March, manipulates the supply side of milk production, attempting to give milk prices a boost.

Proponents hope that $60 million will be raised in the next year through:

* a product removal program where finished milk products would be moved out of the U.S. market.

* a diversion plan where producers would be paid an incentive to curb future milk production.

* a cow removal program to decrease the overall dairy herd.

Encouragement. According to Jerry Kozak, federation president, said the assessment was lowered to encourage more farmers to participate.

“CWT’s goal is to achieve an average 400 percent net return on investment for farmers,” Kozak added.

Although participation fell short of the target, the program will continue to solicit participation from farmers and dairy cooperatives.

National Milk Producers Federation represents 70 percent to 75 percent of the nation’s milk producers.

Doubt. Despite backing by dairy groups like National Farmers Union and Dairy Farmers of America, doubts remain about the program’s merits.

Skeptics argue if milk production drops in one area, other producers will see it as an opportunity to expand.

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