Dairy Farm Income Enhancement Proposals

Sustainable Milk Inventory System Act

Submitted by Mark McAfee

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Posted by Mark Mcafee on August 25, 2018 at 10:27 am


Supply is a factor of total processor total demand per region. Export is included in that demand. Farmers set prices. These regional prices will be different to adjust for regional cost differences. Prices are supply by region are adjusted quarterly to adjust for changing supply requests. Regional Quota is issued to reflect this increase in demand.

I hope this answers your questions.

These questions have already been addressed and refined in Canada over the last 50’years. SMISA is an American plan to leverage the best of the Canadian system and refine it for use in America. Any system must have control of its Three Legged Milk Stool. At present US farmers control no
Legs....we are legless.

For anyone that has a problem with supply management consider this. There has never been a free marketing system in America in the last 50’years. The government has regulated prices and systems. Current price identification systems do not work. When supply drops, price does not rise!

Does that sound like a free market? It is a broken system that takes gross advantage of farmers.

Posted by Mark Mcafee on August 25, 2018 at 10:12 am


Great comments

Over the last ten days SMISA has already evolved to address some of your concerns.

An updated SMISA version will be posted soon.

In answer to your comments here are the changes.

There is no difference in export price paid to farmers. The regional boards set prices based on all demand requested by processors for all purposes including exports. Farmers don’t export processors export products.

Regional farmer boards set prices based on USDA FMMO regional costs of production and other cost of production indices. This is a foreign concept to most farmers in America because in the last 80 years farmers have been price takers and not price setters. This is very normal in Canada where farmers set prices by region to adjust for regional cost of production differences

Posted by Harry Stugart on August 24, 2018 at 10:04 am

Hi Mark,
As I read your program starting with NUMBER 1 my concern is with exports and the trade agreements. I agree that all milk produced should not be subject to the marginal value of the supply and demand on the world markets. But since over 15% of our current production must be exported because it is not being consumed in this country would production possibly need to be reduced to the regional demands? NUMBER 2 and 4, How is the regional price (who does the cost of production calculations?) determined for the Quota amounts? NUMBER 5 and 6, Is export demand included in the Quota for a region? How is it determined which regions get to export? What is the over quota milk priced regionally based on? Please respond.

Posted by mark mcafee on August 23, 2018 at 5:08 pm

Our SMISA concept is now posted at the CA Dairy Campaign website.

We are getting strong support from directors at all three major coops. We have met with congressmen and have support. We have not met one dairyman yet that does not want to seize control of the Three Legged Milk Stool and its elements.

We meet with Bernie Sanders staff on Sept 12th in DC.

Posted by Mark Mcafee on August 18, 2018 at 11:57 am

The idea that milk should stay local. Is so important

We have lost organic processors in California. Those processors have left CA to relocate to areas of the USA where they can buy organic milk cheaper. Then they ship finished organic products back to the 40 million consumers back in CA.

Trucks cost money and moving milk back and forth across America is not green or clean. All it does is cost consumers money and burns diesel. It also costs jobs in CA.

Regional milk supplies should stay local. Trucking milk from CA to Indiana is crazy. That’s happening right now. Only to have it shipped back to CA.

Regional control by farmers serving regional needs of processors serving regional consumer needs.

Posted by Mark Mcafee on August 18, 2018 at 11:17 am


I like your comment. What you are really saying is important. You want your local state area to be served well and not cheated.

I have found that the FMMO structure accounts very well for all milk. They know where all milk comes from and where it all goes to.

I totally agree that every area of the USA would need a FMMO zone. Right now a few areas are not covered. That is easily fixed.

Not sure about each state having a FMMO admin. This costs a lot.

I totally agree that movement Between FMMO areas would be controlled and local processing must be fulfilled first.

The SMISA structure really helps local processors by assuring local production thrives and survives.

Our friends in the NE that serve local cheese makers have voiced this opinion very loudly.

Dairies should be local and serve local demand and supply first. Totally agree.

Thank you for your comment on the “Three Legged Milk Stool.”

On Tuesday our team is conferencing with the Sanders team. We are working to meet with others to assure that we get full bipartisan support from both sides of the isle. This is an American crisis for all sized dairies regardless of location. We must have farmers retake control of their futures or we won’t have farmers. That’s a fact. Look at the last 50 years.

The best predictor of future human events is a review of the past history of human events.

We need a new structure. SMISA changes the way farmers view each other. It must be collaboration verses canaballization.

Posted by Melissa Bravo on August 17, 2018 at 11:02 am

Mark, I liked this presentation that you gave at the meeting in Albany.

I would want to see the federal orders completely redrawn to reflect the fact that producers are bound by state boundaries first and all of their income and expenses are dictated by local and state regulations.

A do over.

50 federal orders plus or minus five or more to allow for territories to get started so that the producers in that state/territory can see what they are agreeing too before they sign a contract to work for this industry going forward.

First and foremost, at a minimum, within each state federal order boundary, there must be a processing capacity plant sufficient to take resident producers raw product first; and payment for its full value be given before it leaves state boundaries or out of state raw product is brought in to meet demand.

Secondly, all milk production in the state if going into a bulk tank must be licensed and a three panel group of inspectors hired to count cows and audit volume per cow three times a year within each federal order.

Posted by mark mcafee on August 16, 2018 at 6:08 pm


SMISA does not require COOP membership. SMISA is a Federal Milk Marketing Order system that is regulated by farmers themselves. Each region has a farmer board. That board uses data collected by the USDA and the FMMO to make good decisions for their regions.

Posted by Mark Mcafee on August 16, 2018 at 10:38 am

The SMISA system would have three major elements:

Import export controls.

All of these elements are controlled by farmer boards at the FMMO region level to allow for differences by region.

This costs nothing for the tax payer and prices for consumers would be stable.

If we want more of the last 50 years. Do more of the last 50 years.

The “SMISA three legged stool” is what we need for a future for dairies and our children’s dairies.
The Canadians have endorsed it!!!

Posted by Donnalyn Shuster on August 15, 2018 at 9:22 pm

Sounds much like a proposal made 20 years ago by a dairy Farmer in my area that would set individual quota based on last 5 years of production and allow a 5-10% variance. Anything outside the variance would result in a lower cwt.price. If I am interpreting this correctly, my concern is requiring all producers to join a co op. Heard stories of Co Ops going out...and taking farmers with them. Glad to see, however several proposal s here actually addressing quota as a viable option.