Editorial

Whenever someone prospers during an economic downturn, some politicians roll out the old saw that "something's wrong" in an effort to placate their constituents.

Lately, in lieu of any substantive help for dairy farmers -- who depend on an arcane, Rube Goldberg-style milk pricing system -- members of Congress have trotted out the tried-and-true antitrust conspiracy theory. Right along with the other debunked conspiracy theories of our time -- including who shot President Kennedy and the "fact" that the Air Force has flying saucers hidden in an Ohio hangar -- the position that any dairy processor that makes money is in cahoots with some unnamed co-conspirator makes points for the politicians but doesn't help farmers one wit.

At its best, it is salve on the wounds of the many farmers who have suffered through historically low milk prices. At its worst, it is a cynical diversion from fixing the real problem -- a milk pricing system that is unsustainable and creates wild price swings that hurt producers and processors alike.

In previous editorials on this page, we have pointed out the iniquities and plain lunacy of the milk pricing system that doesn't take into consideration the price of production.

We have also pointed out the unique challenge of milk production, wherein farmers cannot increase or reduce production capacity -- cows -- without lots of lead time.

We've also pointed out that producers have tried to right this ship unilaterally through herd reduction under the Cooperatives Working Together program.

But once the folks in Congress got involved, the realities of milk production and processing are lost to the realities of politics. Politicians such as U.S. Senate Judiciary Chairman Patrick Leahy tell farmers who are desperate for a lifeline that the problem is a result of evil processors -- some of which are farmer-owned cooperatives -- that take advantage of them.

"The current crisis only serves to illuminate the industry's structural issues," the Vermont Democrat told a recent hearing in St. Albans, Vt.

"If we are to truly solve the problem of unfair dairy prices, we need to tackle the damaging anticompetitive practices that have been allowed to grow in the dairy industry under the incompetence and corruption of the last administration and, frankly, for over three decades," said committee member Sen. Bernard Sanders, I-Vt.

Yet, processors are paying the government-set prices for milk. How could that be portrayed as conspiratorial, unless you include the government in the conspiracy?

The answer to the problem is a milk pricing system created by farmers and processors that takes into account not only supply and demand and overseas trade but the costs of production. That last element is crucial to the survival of small and large dairy operations alike.

It is fashionable these days to accuse "Big Ag" of creating all of the conditions that ail American farmers. Though they provide a market for the millions of gallons of milk produced around the nation, these processors are portrayed as the bad guys.

Yet, without them and their marketing efforts, it is easy to imagine a scenario in which demand for milk, cheese and other dairy products withers, placing producers in an even more vulnerable position.

Secretary of Agriculture Tom Vilsack has attended lots of "listening sessions" on the dairy disaster. He's even convening a committee that will meet for two years to take a look at how milk is priced. Lots more meetings will follow.

Such showmanship now will do nothing to help dairy farmers in the short term.

The milk pricing system is fundamentally broken. Unless and until the cost of production is factored into milk prices the only product of these meetings will be more hot air.

 

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