Tough Times, Tough Choices

By: nilou
Release Date: June 2009
Jerry Kozak,
President/CEO
A few months ago, there was light at the end of the dairy price tunnel. Cheese prices had rebounded and the futures markets were looking up. Lately, however, it appears that light was merely the presence of an oncoming train, in the form of prices rushing back down to the government support level. This is certain to be a cruel summer for dairy farmers all across the country, all of sizes and production models.

At a time of damaging prices and desperate feelings, farmers are looking for hope and answers. Some are supporting one or more plans to impose supply controls. Some in the coming week are planning to dump milk. Others are looking for more activity on the part of Cooperatives Working Together.

In order to provide leadership and steer the enormous collective energy of the industry in a productive direction, NMPF recently announced that it will create a new strategic planning task force to examine the challenges currently facing farmers, and engage in steps to address those challenges.

The task force will be led by people representing NMPF’s member cooperatives, but will also include those engaged in CWT. The idea is to make the table large enough to encompass the breadth of ideas about ways out of the current economic crisis, but small and manageable enough so that we can actually get things done. I often say that if the "hall talk" at the many meetings we all attend actually could produce tangible results, none of us would need a job. But it can’t. We need a structured process to guide us along a well-defined path, as opposed to just throwing spaghetti at a wall to see which sticks the longest. The first Strategic Planning Task Force meeting will be at the June 10 NMPF Board meeting, with an aggressive schedule to complete its task as soon as possible.

The overriding purpose of the Task Force is to build consensus across the dairy producer community about the underlying factors affecting producer prices, and examine the ways in which the producer community can realistically work on those factors. The specific goal of the Task Force is to analyze and develop a long-term strategic plan for consideration by the NMPF Board of Directors which will have a positive impact on the various issues influencing both dairy supply and demand. Consideration of any short-term options will also be part of the discussion.

Just as we’ve done previously during preparation for consideration of recent Farm Bills, we also will examine the effectiveness of current government dairy safety net programs, including the Milk Income Loss Contract program, and the Dairy Product Price Support Program. Both are currently proving their value, though neither is perfect.

As evidenced right now by how active both CWT, and the government support programs, are, what the NMPF task force must consider is the proper mix of both industry-led self-help programs, and government-funded efforts. CWT was never meant to replicate or replace the role of the federal government, and yet we can’t expect Congress to be creating new or different programs every time milk prices tumble. It’s also going to be crucial that those in dairy production work together and speak with one voice when it comes to asking for help from elected officials. The proliferation of various plans allows us to weigh different ideas, but at the end of the day, once the vetting is done, we have to be focused on one public policy objective, not a confusing assortment of many.

We need to be extremely careful that we have a clear focus on the causes of the current price collapse. Working on the wrong problem will only create misdirected solutions. Today’s low prices are just another manifestation of how dreadful the global economic recession is. It’s worth noting that this is not just a problem we face in the U.S. Dairy farmers all around the world are engaged in similar struggles over how to cope with the low price of milk. Farmers in this country need more than gestures, though; they deserve to hitch a ride on a train that will actually reach its destination.

Submitted by nilou on Mon, 06/01/2009 - 22:12.

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