Taking a few dollars from the excess milk produced and having that money redistributed is a nice gesture but it will do very little to help producers. What needs to happen is to produce less milk in order for demand to meet supply. CWT does a nice job of taking cows out of production, but why settle for just removing healthy and random cows? This creates the perfect opportunity for us to produce a better product for consumers, improve the dairy herd as a whole, and improve our industry’s image at the same time. I vote that we need to lower the salable bulk tank SCC limit to 300,000 to get in line with the other major exporting countries across the globe. The European Union limit for shipping milk is less than half of the US, and they actually enforce their limit! I find it embarrassing that we have tried for years to lower this and there is opposition out there that we cannot lower the limit from 750,000. By incorporating this new standard, it will force all producers to cull a few of their chronic and problem mastitis cows that are not making salable milk and are putting the rest of their herd at risk. The eyesore operations that give the dairy industry a black eye will be forced out of production. In the end, we will have a better quality product to put on store shelves, and we are able to put our industry in a positive light as producers coming together in order to produce a higher quality product.

Trent Olson
taospring@hotmail.com

Greg Andersen, no one respects your opinion more than me. Every opinion in the debate is crucial to this industry, this nation and believe it or not the world. The U.S.A, innovators of a free market society has over a long period of time misplaced its priorities. U.S. producers can compete vigorously with countries that have the same respect for their consumers, workers, producers and environment. The environmental practices that many of our nations farmers employ either with federal funds or with their own money are extremely costly but a benefit to all our citizens and this nation. Bio digesters, methane projects, recycling and other major farm projects are making improvements to waterways and the air we breath. Many large producers have reduced imports of fertilizer through these uses, further enhancing our goals to make this a better place for our children’s future.

It all costs money. Our regulations come at a price. In the end, producers like Sea Gull Bay and all the others are told they need to produce milk at world market prices. Set market manipulation to the side, that’s a given and we need government to investigate every phase of the industry. To understand the real problem that lies ahead of all dairy producers and all Americans for that matter, you must pretend you are the CEO of a major Global Company. Sit in the shoes of that person for five minutes. (Q) As a CEO what are your goals? (A) To make as much money as I can for the company I lead, to take it higher on earnings, smash the competition when I can and examine how to raise future profits. Remember, CEO’S can be fired, forced to resign or make millions in salary and stock options based on the companies earnings. Which way as a CEO would you prefer?

If I were a CEO of a large Global Dairy Company I would be a lot less concerned with dairy producers in the U.S. and a lot more concerned as to where I could procure inexpensive product that would boost my bottom line, no matter where it came from. I can’t really blame the CEO of these companies or the processors. The law allows them to circumvent what is morally correct. Morally correct would be to use all the milk made in the U.S. first and then balance with imports for countries we recognize as having our quality standards or higher. Morals and big business have not been a strong suit in recent years. The moral compass is broken and without some type of regulations be they by Government or our own industry, every producer in our country is threatened. Our U.S. flag is made in foreign countries, why not American cheese or other “American dairy products”. Get ready!

Understand this, If most people walked in the shoes of a CEO of any large company be it dairy, textiles, steel, widgets and you could boost your companies earnings dramatically by importing inexpensive products from countries that promote indentured servants, no workmen’s compensation, no unemployment insurance, virtually no sanitary standards for consumers, little or no regard for the environment; where would you go buy product the product?
The less milk made in the U.S., the more inexpensive product I can buy as a CEO. As a CEO I would need enough milk for fluid consumption and product lines that require rapid turnover for dating purposes. The rest of it, as long as no one care pay attention, not the consumer, not government, I would import as much as I could. It would make for record profits of my Global Company and remember what my goal is!

Our Government is supposed to be for the people and by the people. As a citizen who paid little attention to why our country has gone astray, I can only say, I am now awake. Now that Global Corporate thinking has infiltrated one of the last possible vestiges of American Agriculture, I see the entire U.S. landscape more clearly. We have become a country for the Global Companies and by the Global Companies. We have lost our way in pursuit of providing the American consumer a cheap product. All the while, U.S. producers, factories, jobs have disappeared across this nation. We have come to the cross roads. Few jobs, greater government assistance, less tax income, American dollars lining the pockets of other countries for oil, dairy products, textiles, you name it, you can buy most anything cheaper in countries that do not adhere to regulations we have for all the right reasons. With our money, these other countries buy our treasury bonds and with each day that passes a little more of the American dream fades away from our children’s hands.

Make no mistake, France, Germany, the Netherlands and other countries that in many instances have surpassed or met our standards are also feeling the effects of back door imports. Many of these countries have some type of govt. protection for their farmers and consumers. Even New Zealand, the country that everyone preaches we need to compete with on the world market, even they have town farms, that produce milk year round that receive a price that is much higher than that sold on the world market! New Zealand makes sure the producers they need for their own country are protected to some extent.

This issue is much larger than just dairy. I believe we are in a fight for the very soul of our nation. How do we fight? We educate our consumers and ourselves. Want an education,visit Milk sucks.com. We need to confront those that portray our producers and product in a bad light. We need to bring our message to consumers that the American dairy producer provides the highest quality, most nutritious product in the world while adhering to regulations that benefit our nation. We need the American consumer to become more aware of the fact that made in America is local and benefits everyone in the country. As an industry, as a nation, we must confront every battle line head on. We will never always agree but we should always remember, we are on the same team. Our ultimate objectives must be for the betterment of our industry, our nation as a whole and raising the bar of many countries around the world, not lowering ours.

I urge every producer to become a sales representative for American Dairy Products. Made in America should mean just that. Convey to your elected officials our industry has no problem with imports, we believe in the free market system, as long as the country of origin plays by our regulations for consumers, workers and the environment. If we adhere to those rules, our industry and our nation can compete and our products will be in demand for all the right reasons.

It is time to wake this country up. It is time to take a stand not just for our industry but the nation. The American consumer can relate to dairy producers, they use dairy products every day. Your story is their story. With unemployment at record levels, incomes down, homes in foreclosure and foreign products on every shelf, the American consumer relates very well with what has transpired in the dairy industry. Your story is the story of this country. Tell it well and we may wake up a sleeping giant, the U.S.A.

Get involved, keep your head up and keep the faith. The future of this industry and this nation is in your hands!
-Dave Rama

My View of the Dairy Situation

I am not always successful at putting my thoughts onto paper. However, I will attempt to concisely share my view of the current dairy crisis.

I have tried to educate myself about the underlying causes of our situation by reading about the proposed solutions (Holstein’s plan, S. 889, USDA actions etc.) as well as listening to the NY dairy meeting at Morrisville College. I have learned many things from these presentations but still have a lot to learn about our industry.

Foremost, I admit that there are some very serious problems with the way that milk is priced today. Although I wish that we operated in a free market–we do not. There are plenty of producers to make a free market but there are so few buyers and traders of dairy products that we operate in an oligopoly more than we do a free market. The price of cheese on the CME is too easily manipulated. I would suspect that the same players that drive the cheese price up and down are also profiting by trading Class III futures. If so, that is insider trading and should be stopped. I support any investigation into price manipulation on the CME.

Secondly, I think there should be some import restrictions against casein products that are not real dairy products. We must comply with WTO rules in order to keep the world market open to us, but we shouldn’t allow non-dairy imports to be an easy substitute for our milk. I support any action that protects us from phony dairy imports but also keeps the world dairy markets available to us. Bill S.1542, sponsored by some New England congressman would impose tariffs on these types of imports. I support this bill and have let my state Representatives and Senators know about it.

Thirdly, the NASS survey for reporting milk production is not accurate enough. Since we all pay promotion on every pound of milk we market, why don’t we use the promotion dollars collected to accurately report monthly milk production? I support any measure to improve the accuracy of reporting information that affects dairy markets.

Lastly, I would like to mention the solutions that I do not support. I am opposed to any form of government administered supply control. Both Holstein’s plan and S. 889 propose a producer funded but government administered supply control board. Generally, a “board” or committee will be responsible for estimating future demand for our milk and then setting production limits for each producer. In short, a small board will be given the responsibility of managing the nation’s dairy herd. I do not believe that this could be successfully done. Dairy economists are very intelligent. However, their intelligence is not equal to the complexity of the enormous dairy economy that encompasses producers, processors, retailers, consumers, and governments through several regions, countries, and continents. We should not expect any one person–or any team of persons–to be able to predict, or manage, a healthy supply and demand balance for our product. At any one time, five different dairy economists will likely have five different forecasts for dairy prices. I have more trust in an industry made up of many individuals making individual decisions than I do in an industry that consists of many individuals but is managed by a few. If I make a marketing or business mistake on my operation, then I suffer the consequences. If a governing board in charge of the national dairy herd makes a mistake, then the national herd suffers.

In short, I support any measures to increase fair free-market principles within the dairy industry. I oppose any proposals that include government administered supply control. I want the government to do less, not more. I believe in the same principles in the following Ronald Reagan quotes:

“Government is not a solution to our problem, government is the problem.”

“The government’s view of the economy could be summed up in a few short phrases: If it moves, tax it. If it keeps moving, regulate it. And if it stops moving, subsidize it.”

“Government’s first duty is to protect the people, not run their lives.”

“Concentrated power has always been the enemy of liberty.”

“No government ever voluntarily reduces itself in size. Government programs, once launched, never disappear. Actually, a government bureau is the nearest thing to eternal life we’ll ever see on this earth!”

Respectfully submitted,

Greg Andersen
Seagull Bay Dairy, Inc.
Idaho
seagullbaydairy@dcdi.net

P. S.

I respect the efforts and opinions of the Holstein Association, Bryan Gotham, Dave Rama, and many others who are proactive in improving our situation. I agree with many of their ideas as stated above. I believe dialogue and debate is good for us. If I appear to be uninformed on any of the issues addressed above, I welcome your contact.

New York Dairy Farmer Bryan Gotham put together two slide show links that feature his comments and analysis on “establishing law and order within the dairy industry.” We welcome everyone’s comments and suggestions for change, and will continue to share them on the blog!

15 min. version
http://www.authorstream.com/Presentation/usdff-222974-889-dairy-solutions-short-video-powerpoint-version-entertainment-ppt/

25 min. version
http://www.authorstream.com/Presentation/usdff-222971-889-dairy-solutions-long-video-powerpoint-version-entertainment-ppt/

Both videos cover three solution points:
1) a new price discovery for dairy farmers
2) farmer-funded supply management
3) incentive mechanism to discourage imports of milk protein concentrates and other milk derivatives

The video producer, Bryan Gotham is a 700-cow dairy farmer from St. Lawrence County, N.Y. He has been sharing the video with leadership throughout Washington. Gotham was part of the grassroots effort that got 250 farmers to the hearing on Tuesday, July 28 – the largest crowd EVER for a hearing.

“Washington is well aware that the system is broke,” says Gotham. “As individual farmers we have also failed ourselves because we have remained silent. I am part of the silent majority that is coming alive and policy. Industry leaders need to be sensitive to our voice in this time of crisis.”

Thank you for taking the time to view. Comments are welcome.
(provided by Tammy Graves, Richfield Springs, NY – gravesarborgraphics@yahoo.com)

We asked for thoughts of producers who attended the Congressional Hearing on the dairy crisis in Washington D.C. last week. Today we have our first response from Deb Windecker. Thanks for sharing your thoughts with us Deb! If you were also in attendance and want to share your opinions please e-mail them to Lynnette at lwright@dairybusiness.com

I attended a portion of the hearing because we had appointments with congressional staff. I can tell you having 250+/- dairy farmers attend the meeting certainly put some heat on the testimonials who are not used to having an audience. They are used to speaking with congressional staff who are somewhat nieve to the dairy business operations.

There were several testimonials who obviously would like to see the dairy business in this country operate under the premise of “status quo” and allow this manipulated system continue to erode the rural communities in this country. I was very disturbed by the representation of the American Farm Bureau testimony.

I truly believe, as dairy farmers/consumers we can not assume our organizations (cooperatives, due paying membership organizations are working on our behalf. I believe the silent majority needs to start speaking out and a grass roots effort needs occur to let these organizations know we are not happy. I think that is what occurred at the hearing. We were representing ourselves. Silence is ACCEPTANCE – If farmers/consumers don’t speak up in this country – govt./organizations assume everything is o.k.

The next steps are for farmers to get involved and bring in consumers. They to get involved with Policy development on Farm Bureau and call on their cooperative board member, call their politicians and unite that this pricing system is very manipulated and not a free market system when dairy food companies profits are up 150% and farmers incomes are down -50%. Farmers deserve a more secure stable price.

~Deb Windecker

Last week, producers from several states converged on the nation’s capital to express concern and provide real information to congress about the plight of the American dairy farmer. One of the speakers was Gordie Cook, not only a dairy farmer, but a member of the National Holstein Association Board. Following is a complete copy of the speech he presented.
(compliments of Holstein USA)

________________________________________________

Testimony of Gordon M. Cook, Jr.
Dairy Producer from Hadley, Massachusetts,
And Member of Board of Directors
Holstein Association USA, Inc.

Submitted to the House Committee on Agriculture
Subcommittee on Livestock, Dairy, and Poultry

For a hearing to discuss
“The Economic Conditions Facing the Dairy Industry”

July 28, 2009

House Agriculture Committee Room
1300 Longworth House Office Building
Washington, D.C.

Thank you Chairman Peterson, Chairman Scott, Ranking Member Lucas, and Ranking Member Neugebauer for inviting me to testify. I am a dairy farmer from Hadley, Massachusetts who milks 65 cows, and I am here representing the 30,000 members of the Holstein Association USA, Inc., a non-profit dairy organization that is headquartered in Brattleboro, Vermont. I am here to talk about our Dairy Price Stabilization Program which we believe will be able to stabilize the peaks and valleys of milk prices.

The crisis facing America’s dairy farmers is well documented. You are aware that basically every dairyman in the country is losing money on every pound of milk they sell.

What has led us to this crisis? The landscape of the dairy industry has changed significantly since our current milk pricing system was established. Sometimes there is a disconnect between the producer and processor which generally is not beneficial to the dairy farmer.

For example, for one gallon of milk that the consumer pays $2.99 at the grocery store, the dairy farmer who produced that milk gets just 91 cents. The bulk of the $2.08 – the difference between what the consumer pays and the farmer receives – goes to the dairy processor, and retailer.

We have seen changes in the quantities of dairy ingredients and products being imported to the United States from other countries. In general, as dairy imports increase, the price paid to U.S. dairy farmers decreases.

A third change is the development of sexed semen and the effect it is having, and will have, on the amount of milk produced in the United States. This year we expect 63,000 extra heifers to enter the national dairy herd, and in 2010, that number is expected to increase to 161,000.

Historically, the U.S. milk pricing system has encouraged dairymen to produce all the milk they can, which has led to instability in prices paid to farmers. In the last four years, we have seen the U.S. All Milk Price average fluctuate between $20.50 and $11.50.

Milk is perishable, unlike other agriculture commodities such as corn, soybeans, and others that can be stored for days, or months until the market reaches an acceptable level. It is time for our industry to change its mindset and start producing milk for the market, instead of hoping we can market all the milk we produce.

The basic objectives of the Holstein Association’s Dairy Price Stabilization Program are:

” To prevent severely depressed producer milk prices that result in low and negative returns over feed costs to dairy producers.
” To reduce the volatility of milk prices to dairy producers and thereby reduce the price risk to dairy producers, dairy processors, and consumers of milk and dairy products.
” To complement, and not replace, other existing dairy programs such as the federal dairy price support program and the Milk Income Loss Contract Program. In fact, our program may reduce the federal government cost of both of these two programs.

Here is an overview of the program, and further details have been submitted to the Committee in writing. Let me stress, this Program will not require the Farm Bill to be opened.

The Dairy Price Stabilization Program removes the incentive to produce milk beyond the levels our market demands. It rewards producers who stay in line with market needs.

The U.S. Secretary of Agriculture would administer the program with an advisory Board. The Board will forecast the 12-month domestic and export market demands for fluid milk and manufactured dairy products.

With consideration of the current level of milk production, a determination will be made to the needed change in milk production to fulfill the market needs for each quarter of the next 12 months and return a profitable price to dairymen. This is referred to as the “allowable milk marketings”.

Dairy producers who maintain their milk marketings by quarter within the allowable milk marketings will not have to pay market access fees.

Dairy producers who expand their operation and exceed their allowable milk marketings will be accessed a market access fee per hundredweight on total milk marketings. Initially, we would expect the fee to be between $2.00 to $3.00 per hundredweight on all milk marketed as determined by the U.S. Secretary of Agriculture and the Board.

The fees collected from producers paying the market access fee would be distributed as a bonus to the dairy producers who stayed within their allowable milk marketings.

Producers will receive their base by filing their history of milk production and monthly marketings to their area USDA Farm Service Agency (FSA) office. The FSA office will notify the producer’s milk plant or dairy cooperative to deduct the market access fee, if the producer exceeded their allowable milk marketings.

The cost of the program to taxpayers is nothing. We would expect an assessment of less than two cents per hundredweight to producers on all milk marketings to cover administrative costs of the program.

We are certain that there will need to be some sort of short term fix, such as a temporary 6-12 month raise in price support or some other quick remedy. However, the dairy industry can not keep coming back to Washington for continued bailouts. The Dairy Price Stabilization Program provides a long-term solution.

In closing, the Holstein Association’s membership of 30,000 dairy producers of all sizes from coast to coast appreciate the study you are doing on the U.S. dairy crisis. Something needs to be done now to stop the volatile producer milk price roller coaster ride our nation’s dairy farmers continue to experience.

The Dairy Price Stabilization Program was developed for dairy producers by dairy producers and is a long-term solution to the problem of milk price volatility. This Program will be beneficial to dairy farmers, milk cooperatives, processors, and consumers.

Thank you very much.

The current dairy economic situation is making headlines on local and national TV newscasts. ABC World News Tonight ran a segment, “Dairy Farms Disappear”, that explained the current dairy situation, including the price dairy farmers are paid for the milk they sell and the actual cost to produce milk. Two dairy producers from California discussed the history of their farms and the current financial situation facing dairy farmers across the United States. http://tiny.cc/fhpfw
MSNBC recently visited dairy farmers Susan Troyer and Joe Hibschman in Elkhart county, Indiana. The cameras followed their families as they discussed their farms and their involvement in the local economy as well as the current dairy situation http://tiny.cc/mEpyu

When: Tuesday July 28, 2009 – 8:30 a.m.

Where: 1300 Longworth House Office Building, Washington D.C.

Why: Dairy Producer’s voices need to be heard first hand!!

Transportation: Chartered bus has been reserved leaving Oneonta, New York Bus Line in Oneonta @ midnight on Monday July 27th

returning approximately 11:00 p.m. on Tues. July 28th.

Cost: $50 per person NOW FREE!!!!!!!!!!!
Only 26 spots left – call today!

To Make Reservations: Andrea Robertson – 607-267-4657 or Deb Windecker 315-866-4221 or email Deb windecker at debwindecker@gmail.com
Dave Rama’s Call to Action:

Urgent: Next congressional milk hearing is scheduled for Tuesday, July 28, 2009 at 10:00AM at 1300 Longworth House Office Building.

If you wonder why no one has come to your aid from Washington, here is some of this week’s testimony.

” We have too many cows producing too much milk for the markets at this time.” “The losses are already made”. “It will be better to do nothing now and allow the market to find equilibrium while working toward the goal of transforming the U.S. dairy industry into a consistent global supplier of high quality dairy products.” “Eliminate the price support program. It is a burden to the U.S. dairymen and tax payer”. “The supply management program, irrespective of its merits or difficulties, cannot solve dairymen’s problems today.”

(Understand this folks. There is an agenda. Growth to some means going from 100 cows over 30 years to 1200 cows. Growth to others with a much bigger agenda means going from control of 150,000 cows to 250,000 cows in less than two years and then on to 400,000 cows and so on. If your agenda is the latter, you want nothing to do with supply management at all. A privileged circle wants to grow at lightning speed, any clues why?????? If you are not in that circle, where are you?

While there was some favorable testimony to dairy producers cause, congressional chairman and members said they were conflicted. They are not hearing your message clear enough.

I ask every person who receives this email to call four producers and form a chain. The room where the meeting is conducted is small and first come first serve to get in. If the halls are filled with producers who feel their voice is not being carried, you will be noticed! This is the last scheduled meeting on the economic conditions in the dairy industry. I urge you to be in DC next week, Tuesday, July 28 and be waiting in the halls of the Longworth House Office Building by 8:30am if you expect to get into the hearing.

Those that do not get in, should canvas every Congressional and Senate representative they have and let Washington know where this industry really stands!

This is it. Time to kick into the political arena! Don’t expect someone else to carry the ball for you. They are not hearing enough voices from dairy producers. The other side is well organized and they have an agenda and it appears most dairy producers are not part of it! Congress cannot act unless they hear your voice and it is not loud enough! This is Right against Might. Talk is cheap, lets see who wants to carry the ball!

Bring your bankers too, they might also have a story to tell! Time to visit DC!

Dave Rama

No, I do not support Holstein’s proposal for milk price stability. Fact-USA Dairy Producers have not met milk product demand for many years in the USA. WE export some, but import massive amounts of product that depresses our prices. If you do not address imports then what’s the point?

The last time prices paid to the farmer were below any profit; a retailer was asked why they still charged almost exactly the same as when farmers were making good money, he said. “We don’t want to confuse the customer”.

Johnny Stansell
Texas

____________________________________

Yes, I do support the DPSP from Holstein USA.

Boyd Schaufelberger
Illinois

We have done this to ourselves. No other industry would let this happen to themselves. The oversupply we have created has led to a milk price that virtually no farmer can even come close to breaking even on. As our pride and yearn to be independent drives us, we choose to not band together and control our surplus. The oil industry, computer technology and many others have chosen to work together to make their supply equal their demand. Competitors choose to work together so that supply equals demand so that they can all get a fair and reasonable and PROFITABLE price for the product that they make. We have not done this.

Demand will never again be the same. Two of the most populous countries – China and India – are increasing their domestic milk production by close to 10% per year. Let alone the fact that many other countries are doing the same, becoming self-sufficient in their dairy production so they can cut out the costs of importing it. This leaves us with fewer places to put our milk and thus an oversupply is created. We cannot blame the co-ops for not giving us a better price for our milk. They have no incentive, reason, or need to give us a better price when the demand that they have for our milk is far less then the supply that we give to them. They are simply weeding out the men from the boys, but the men are absorbing the boys and the dairy industry is becoming consolidated.

What about creating some sort of supply management program? The country would be divided into 6 regions and each region would have 2 representatives representing the dairy farms from that region. The representatives would meet and form supply management actions. Dairy farmers would sign legally binding documents vowing to carry out any actions required by these ideas with the incentive that they would be guaranteed that it would be of their best interest long term. For example, the entire country of dairies could cull 5-10% of their herd. Cull 5-10% of their bred heifers. It would be a continuous control management system. This, in turn, would create jobs as well. Surveillance and disciplinarian personnel, more representatives, etc… And milk co-ops would never support such a thing because it would not allow them to control the milk price. We would.

We slit our own throats in this industry. Because we are so independent and competitive, we search and use every advantage we can go after to advance ourselves. Long-term, these actions will have detrimental effects to our livelihoods. Sexed semen is a great example of this. By 2010, there will be 300,000 more heifers on the market. This is, and already has made the cost of replacements right next to beef price. BST as well has kept more milk on the market for years. These tools are great advancements in technology and management, but should be used on a limiting basis there again based on what supply is needed for our demand. Where demand for milk and milk products is shrinking, so shouldn’t our supply. We are all together in this industry and need to learn to work together as well.

How have we allowed ourselves to get to such a point in our industry? We allow the people that buy our milk to control what they pay us for it. We allow them to pay us what they want for OUR product. We sell our product wholesale yet buy our supplies retail. This is backwards and it is high time that we create our own solution rather than allowing the government to come up with a temporary solution with just enough carrot in front of our face to keep us settled. However, if we create this ourselves, where is the money going to come from? I don’t know.

Discouraged,

Young Dairy Farmer in VT