Thursday, November 2, 2006
Thank you and good morning to everyone. NMPF is celebrating its 90th anniversary, and I am pleased to report that NMPF is stronger, better organized, more unified, more influential and financially stable than most other 90 year olds. That's important because we will have many other challenges to meet in the next 90 years.
It may be hard to believe, but this is my 10th speech as the President and CEO of NMPF. I took this job just a few weeks before the first joint meeting with DMI and UDIA in the fall of 1997. It's been a great pleasure serving as your President and CEO, and I’ve enjoyed speaking with many of you this week. I want to thank Charles Beckendorf for his leadership, counsel and friendship again this past year. I want to also thank the NMPF Officers, Board of Directors and our member Cooperatives for their support. I want to thank Tom Gallagher and Tom Suber and their staffs for their support and the great working relationship we have developed - all three organizations are working as a team on your behalf. I would like my staff at NMPF to stand, and to thank them for their hard work and dedication this past year. They all mean a lot to me and I am very fortunate to have such an outstanding team. Thank you.
I must admit that it gets increasingly difficult to stand up here and deliver a new and stimulating message each year, so today, standing in a city that is known for its ostentatiousness, glitter, and hype, I am abandoning the bells and whistles of audio visuals and ask that you just listen to me rather than being distracted by the screens.
When I struggled with what to say today, I thought back on something that a producer said to me a few weeks ago in a meeting. He said, "Jerry, when you put your head on your pillow each night, remember that what you do matters to me, my family, and the community that we live in." It was meant as a heartfelt compliment, but in another sense, it reinforced the tremendous responsibility that our membership places on me and my staff. His remark offered a starkly realistic view of what we are confronted with each and every day. It reinforced what I already knew: that people are counting on us at NMPF for so many reasons. That expectation presents an enormous challenge for us to achieve the type of results that allow dairy producers and their cooperatives to continue to maintain a profitable existence. It is a responsibility that each and every one of us on staff takes very seriously, and is reflected by wearing our NMPF pins as a symbol of that responsibility.
That producer who spoke to me in that meeting helped me to reflect on why I took the job at NMPF 10 years ago, and why I stay at NMPF: to make a difference in the businesses and lives that make up our NMPF membership. It is a passion and commitment shared by all on my staff to do our best to achieve results expected by all of you. It is the challenge of achieving the impossible; carrying out the improbable; the satisfaction of getting people to work together and compromise for the good of the whole dairy producer community. And when we meet those challenges, the results can be seen directly on the faces of farmers, their families, and ultimately, the communities that benefit so much from a strong dairy producer industry.
Working for producers in this way is the best job I've ever had, as I have said on numerous occasions. It is representing real people, and not some amorphous company of faceless investors concerned only with profit margins. Today, a decade later, I still feel the same passion and fire in my belly as when I was hired.
But today, it is my turn to ask you where your passion is? What about your own individual commitment? What are you prepared to do to help yourself? How will you meet the challenges that face us collectively as an industry?
These are questions that deserve an answer. I hope you will look inside yourselves and answer them with the same passion and commitment that you expect from me and the NMPF staff.
So, what are the challenges that we all face in the coming years? There are three themes that I would ask you to think about today: Transition, Activism, and Optimism.
We clearly are in a transitional period. We are between Farm Bills, and there is no question that this next Farm Bill, whenever it's actually written, will present some difficult challenges. It now appears that the WTO will not be a major factor in influencing the impending Farm Bill. But at some point, I am convinced that a WTO agreement will get done. That means it would be smart, as well as strategically necessary, to examine our own domestic policies and ensure that they are working for us.
We need to decide our future needs and outline what is necessary so we can position ourselves to transition into a truly global marketplace. It's bad that our farmers still have to compete on a heavily tilted, uneven playing field that allows our competitors to protect their markets, while their governments throw up barriers and spend cash subsidizing their exports. The status quo is preferable to a bad deal in the WTO, but the status quo is not ideal. We can't take comfort that the WTO is on hold - it won't be forever.
Setting aside the WTO for the moment, it still is worth having a discussion internally about the future direction of U.S. dairy policy, and that's a point I'd like to explore this morning a bit further. Even without a WTO agreement as a potential challenge to the status quo, we still need to reexamine where we may want to make changes in the future.
Even though it appears that the imminent passage of a WTO deal is no longer going to influence the next Farm Bill, we're also still not certain when that next Farm Bill itself will be drafted. Some in Congress and the USDA want it done in the coming year; others in the farm community think that the current program should be extended another year or two. Our NMPF Board voted earlier this year to go along with an extension, if it appears to be in play on Capitol Hill. So, I think we're well-positioned as an organization regardless of how it plays out.
At the same time, however, our Conclave process made it clear that while farmers are willing to support the status quo, they are also willing to consider some other options. Part of transition is the consideration of movement away from the status quo, toward new and different opportunities.
That's why we have enlisted the services of a leading agricultural economist, Dr. Bruce Babcock of the Iowa State University, to crunch some numbers and examine the pros and cons of different types of safety nets for farmers and cooperatives. I think having someone outside the dairy sector examine different economic options is crucial to informing our process for dealing with Congress, and the next Farm Bill. Dr. Babcock has discussed his preliminary findings with our Economic Policy Committee, and will have more information to share with our members in the coming months.
But being in this transitional environment, I believe that it is important that we position ourselves for the future and make some modifications that will help us adapt when the WTO finally gets resolved.
So I ask all of you to remain open about the policy options that NMPF may pursue in the future. We will need to have further dialogue within our organization, and within each of your cooperatives, in the coming months. We need to maintain a unified front and a uniform message when we deal with our elected officials on farm policy. United, we can get a great deal accomplished, as we did with the 2002 Farm Bill. But if we let individual or regional differences prevail, we will not be successful in our efforts.
If we don’t transition to a different farm policy, we won’t be left with the status quo, but with something worse: I fear we’ll be picked apart - both from inside this country by budget hawks and critics of farmer-friendly programs and from outside this country - by our foreign competitors and by bureaucrats in the World Trade Organization that want to whittle away our programs. I don't believe we can remain where we are indefinitely.
But let me clarify one point before I finish today, and this is a big one: despite these external uncertainties and challenges, question marks such as the Farm Bill and the WTO, the biggest uncertainty of all remains within our industry. I mentioned a moment ago that we have accomplished great things working together, and we have, on so many issues. But we continue to face many challenges, and those challenges have to be met with a new level of activism. And that's the second theme I want you to keep in mind.
There are approximately 62,000 dairy producers left in the U.S. - a far cry from the millions in the past. This reduction in numbers has led at times to decreased influence and impact on Capitol Hill, government agencies and in state legislatures. It is vitally important that you understand what I am saying. It is critical that we organize and commit time and money to helping ourselves maintain a significant presence and influence. And so today, I challenge you and ask each of you, where's your passion and commitment? Where's your fire in the belly to help us achieve the type of results that you expect?
All too often complacency exists within our organization. We need activists, not pacifists. The staff cannot do it alone; we need you to become fervent activists. My favorite Garth Brooks song is entitled "Standing Outside the Fire." There is a line in the song that says "life is not tried it is merely survived if you're standing out side the fire." All too often a number of you stand outside the fire while others are inside the fire. It's time for you to realize that it is not enough to be standing outside the fire. Our dairy grass roots program is good - but it needs to be GREAT! We need to build up our Political Action Committee, and also create a special fund for lobbying those issues so vital for your existence. To many of you, this is a disdainful process. But money and votes talk in Washington, and they always will.
Probably no other aspect of our industry better exemplifies our activism than CWT. Those of you at our town hall meeting yesterday received two great reports on CWT's activities. Our Chief Operating Officer, Walt Wosje, talked about everything that we've been doing in 2006. And of course you also got a great accounting of CWT's overall impact on your prices since the end of 2003, when we first began removing cows and affecting the marketplace. Scott Brown's thorough analysis should put to rest any remaining questions about whether your investment has made a difference in your milk checks. The simple fact is that CWT has, and is having, a positive return on investment. The program works, but it is also in transition.
We faced a difficult challenge this summer when our members decided that an additional nickel would be prudent. In order to keep CWT working in pace with production increases, we need more resources. I realize asking for 10 cents per hundredweight at a time when prices are below average is a tough sell. But given the production increases we've seen, CWT needs more money to do its job. You can't trim a tree with a saw that's missing half its teeth. CWT needs more teeth to remain effective. You will recall that the original concept plan asked for eighteen cents to do the job right. Think about where prices would be today, if we had that eighteen cents!
Not everyone agrees, though, and while we have more support for CWT than when the program started in 2003, our participation level has dropped off from last year. Some people have been focusing on the part of the glass that's empty, rather than the part that's mostly full. We're beginning to slip back to the mentality that existed before CWT was put in place. We're beginning to see individual and regional differences interfere with our progress and letting the concerns of the minority drive the interests of the majority of the producer industry.
I think taking that backwards path is a huge mistake. We need leaders from all the NMPF coops, both GMS and Producer Chairman, to step up to the plate and steer us away from that unfortunate direction. We need people to stop thinking solely of themselves, freeloading and standing outside the fire while most are choosing to do the right thing.
We also see evidence of transition with respect to the operation and execution of CWT's programs. We had two task forces to examine both our herd retirement and export assistance programs. We want to keep these programs working to their maximum effectiveness, and we also want to entertain different ways of making them work. That doesn't mean for legal or logistical reasons, however, that every proposed alternative is viable. Not every path in transition is a road we can navigate. I'm not sure people really grasp that reality, unfortunately.
We have some people who want their solution - and only their solution - to what they feel CWT is lacking. And with respect, what they need to understand is that we can't have everyone's answer. We can only have an answer that most everyone can live with. And that is two very different things. As I've said before so many times, we can't let the things we cannot do, interfere with the things we can do.
So the dynamic within CWT is in many ways the same as designing the Farm Bill, and negotiating a WTO agreement. Not everyone will be completely satisfied. Our success has been designing compromises that everyone hates, just a little, but that's the nature of compromise. It is also the result of providing leadership. Poor leadership is leading people to conclude they can get their way, to the detriment of what a majority of others want instead. I don't think that is an approach that any of us want within our own associations and organizations; I hope it's not what we want for CWT, or for NMPF overall.
So, finally, how does being in transition and becoming better activists lead to optimism? Well, it's clear to me that if we make the right decisions during this transition; if we strategically adapt our policies to a changing environment; if we truly become activists and create a team supported by all farmers while committing the resources necessary; if we continue our efforts of self-help such as CWT; then, we should be thoroughly optimistic about our future. That optimism will be turned into both social and financial accomplishments benefiting our dairy producers and cooperatives.
I am thoroughly optimistic about the future of our industry, and I am encouraged by what I see happening in NMPF. It's the right time to transition, it's the right time to become activists, and it's always the right time to do the right thing.
There is a saying by Teddy Roosevelt: "In a moment of decision the best you can do is the right thing. The worst thing you can do is nothing." I am going to continue to do the right things at NMPF for the benefit of everyone. I am going to continue to stand inside the fire each and every day and fight on your behalf. I hope you will join me inside the fire with the passion, renewed commitment, and optimism to do the right things!
Thank you.
