Dairy Farm Income Enhancement Proposals

Dairy Department Director

Submitted by Bradly Rach

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Posted by Peter Juengel on September 26, 2018 at 9:24 pm

I agree that policy to preserve the family farm is very important. My concern with this proposal is what is to prevent a large farm from contracting direct with the processor for a guaranteed price on all their milk, like what Dannon and other processors are already doing?

Posted by Fred Prichard on September 8, 2018 at 8:38 pm

I have two concerns about the proposals to manage supply that were put forward during the Agrimark meeting. But first, I want to thank Agrimark for inviting me. It was an opportunity to get together with others who share many of my concerns. Since many of those farmers were members of other cooperatives across the country, I would like to see those cooperatives hold similar meetings to listen to their members views.
My first concern is that the growth in milk supply that is putting such pressure on prices is not coming from all dairy farmers across the board. Large dairies are growing and smaller dairies are disappearing. We must face this fact or we fall back into something “CWT” did in its early days, that is, buy out small herds and create space for big herds.
My second concern is that “one size fits all” programs that try to help all types of farms, whether through price enhancements or direct government payments. The largest farms, because they have the most volume, get the most benefit. A price that makes a “family farm” sustainable can be so profitable to a mega-dairy that is becomes an incentive to grow even larger.
What to do? At NFO, we begin by recognizing that milk price has been administered by marketing orders for years. Those orders do not specify one price for all milk produced. Instead they have class prices that are blended for all farmers participating in pools. Using the same approach instead of pricing on use, we would price it on production. All farmers, regardless of size, should get a higher price for the first level of production and a lower price for production above that level. The first level of production would make it easier to maintain a smaller farm. The lower price for higher production would help curb over supply production. In this way we could encourage family farming and control supply where it needs to be done.
Supply management is important, but my co-op, NFO, values family farming and farmer independence just as much. Those values guide us in policy and marketing our commodities. I would like to believe other co-ops established by their members, would have similar goals. When we lose the smaller family farms will there be any need for those co-ops?
I welcome any thoughts you might have on these concerns. We control the future, if there is a future, for the next generation of independent dairy men.

Posted by Wayne Prichard on August 26, 2018 at 6:40 pm

This proposal addresses the difference in cost of prod, between large and small farms, It allows small farms to begin or grow without acquiring base, All farms are treated equally up to the tier one level. Large farms are free to adjust production to minimize or maximize income to market conditions. All farms should do better than under our current situation.
Cooperative leaders should study this proposal as a means of ensuring the survival of their members as well as guaranteeing the existence of competitive markets.

I believe in a market oriented economy. Our dairy industry has always provided an ample supply of milk. We don't bave to be as strictly regulated as Canada to have sustainable farms, but we do need reasonable governing market forces based on sound economics.

Posted by Derek England on August 25, 2018 at 1:14 pm

This is an interesting, simple idea that will force an answer one way or another whether we believe there is any societal benefit to having dairy farms of 4-500 cows or less. Have any calculations been performed as to what tier one and tier two prices would have looked like over the past couple years?