"The United States is a market-based economy. A market-based economy is an open economy in which the market's own laws and forces call the tune — not the government nor any other entity besides the market itself.
The primary forces that rule a market-based economy are those of supply and demand." (Buzz Shahan, COO, United Potato Growers of America, Potato Grower, July, 2019 issue)
While the U.S. government has attempted to establish a minimum price for some milk for some producers, this minimum price has been traditionally an unprofitable milk price below production cost and does not change the forces of supply and demand that rule a market-based economy.
U.S. dairy farmers have ignored milk's market-based rules and have instead relied on a growing economy of scale and cost efficiency strategy of maximum milk production for survival, which has resulted in the price of milk being close to or below production cost.
Dairy farmers need to reject this strategy of being the lowest cost, last dairy farmer standing mentality and adopt a market-based view of matching supply with profitable demand which will deliver excellent profit margins for most existing dairy farmers.
Implementing NDPO's co-op management policies is the solution for
obtaining a sustainable, profitable milk price from the marketplace for most U.S. dairy farmers.
To learn more about how dairy farmers can share in better aligning the milk supply they make with profitable demand and obtain a profitable milk price from the marketplace, contact Mike Eby, NDPO Chairman, (717) 799-0057, firstname.lastname@example.org, or like us on Facebook - National Dairy Producers Organization, or www.nationaldairyproducersorganization.com
Idaho dairy farmer