By Arden Tewksbury, Manager, Pro-Ag
(July 2015) Last week, FARMSHINE and probably other farm papers carried a letter from John Jeter, CEO of Hilmar Cheese Company, Hillmar, California. I read his letter three times before I realized what he was really saying. To me, he was clearly following the message of the International Dairy Foods Association (IDFA). IDFA’s message is very clear. Number one, they want to get rid of the Federal Milk Marketing Orders. They say we don’t need them anymore.
Jeter seems to indicate that dairy cooperatives had been forcing higher minimum prices (paid to dairy farmers) onto milk processors.
In other words, Jeter is saying that dairy farmers have been overpaid for the value of their milk.
Heck, I would be very happy if dairy cooperatives would get behind a new pricing formula that would allow the average dairy farmer a chance to cover their costs. Jeter seems to forget (and I’m sure he hasn’t) that all milk prices in the Federal Orders begin with a survey of over one hundred dairy processors that manufacture milk into dairy products. This survey determines the value that these processors are willing to sell their products onto the market. I don’t see anything in this formula that relates to the dairy farmers’ cost. Not only do the processors have a chance to cover their cost under this system, the Federal Milk Marketing Orders allow a make allowance in the pricing system to help cover the processors’ cost. Wow! Again, what about the dairy farmers’ cost?
Yes, I fully remember what went on in California in the 60s and 70s etc. This is the time when processors were pouring out powdered milk galore and then selling much of the products to the Commodity Credit Corporation under the Milk Price Support Program. Yes, under the support program, the USDA allowed a make allowance to cover the manufacturers’ cost. But, in addition, the California pricing system was charging an additional make allowance on California dairy farmers. Even Senator Leahy (D-VT) and other Senators tried unsuccessfully to stop this monopoly. Let’s tell the whole story, and there is more that could be told.
No, the minimum prices paid to dairy farmers have not been too high. Actually in most years the prices paid to the average dairy farmers have not been sufficient to cover their costs. That’s why we are now down to approximately 45,000 dairy farmers in the USA, and the numbers are still dropping. Dairy farmers must stand up for themselves and pay no attention to those in the industry that want to put you out of business and simply have only factory farms. This philosophy has been on the books since 1970. Only you remaining dairy farmers can put an end to this practice.
Pro-Ag can be reached at 570-833-5776.