Courtesy of Mark McAfee
Dairy farmers from across the U.S. gathered in Albany, N.Y., on Monday to focus on a solution to staggeringly-low milk prices and to rein in growing volatility.
The meeting was hosted by Agri-Mark, a Northeast dairy cooperative, and drew 300 people — dairy farmers, industry leaders, legislators and attorneys.
Mark McAfee, a board member for California Dairy Campaign and California Farmers Union, was there to present CDC’s proposal and told Capital Press the fear and pain in the room was overwhelming.
“It’s literally desperate times, and there doesn’t appear to be any solutions on the table,” he said.
Dairymen are under water with milk prices running $3 to $5 per hundredweight below the cost of production. Markets have been down for four years with three more forecast. Volatility has always been part of the system, but markets aren’t recovering, he said.
About 500,000 U.S. dairies have gone out of business since 1970, and Wisconsin is currently losing two dairies a day, he said.
The problem is dairy producers aren’t controlling the milk supply, he said. When prices are low, farmers produce more milk to increase their revenue. When prices are high, they produce more milk to make up for earlier losses, he said.
It’s led to “cannibalism” in the industry, and it doesn’t work. Even large and efficient dairies are no longer safe, he said.
CDC’s Sustainable Milk Inventory System Act is a simple three-point plan aimed at solving the problem, and it’s been vetted by board members of large co-ops. It involves farmer-driven control of milk prices and milk supply by region and applying discipline to imports, he said.
The plan includes legislation to give USDA the authority to establish a national program of inventory management under the Federal Milk Marketing Order system.
It would be farmer-controlled, but USDA would provide the infrastructure to regulate it, he said.
Unlike former House Speaker John Boehner labeling supply management as “socialism” in the last farm bill debate, CDC’s plan is “smart supply,” he said.
Canada has had a similar program since the 1960s, and dairies there are thriving. The Canadian government and Canadian people have protected dairy producers, he said.
Milk prices there are about $27 per hundredweight, compared with $13 to $14 in the U.S. When Canadian dairy farmers go out of business, it’s from issues like encroachment and they retire wealthy, not from oversupply and low milk prices that lead to bankruptcy and losing the farm, he said.
“We’re collapsing … we need USDA to back up farmers,” he said.
CDC’s plan would provide sustainability through “smart supply,” and it wouldn’t cost taxpayers anything, he said.
It’s drawing a lot of political interest, and it might get additional attention because it would help a lot of people who voted for President Trump, he said.
Supply management failed in the last farm bill, but the situation was different then. Political Science 101 maintains change doesn’t happen unless there’s a crisis and severe pain, he said.
“Right now we’re feeling crisis and deep pain … and maybe something can be done,” he said.
CDC’s proposal, as well as others being discussed, are available at https://www.dairyproposals2018.com/