Ohio Meeting Discusses Milk Market

News EditorDairy Business, Industry News, Price

dollar-bilss-in-a-hole-money-going-down-the-tubeHere’s another story about dairymen and allied industries coming together to discuss the current milk market, and their concerns about it. Farmers in Ohio met to discuss the market effects of imports, marketing organizations and supply and demand, while a panel of experts spanning California to New York presented their plan for a new system of marketing milk.

Past U.S. Holstein Association President Doug Maddox said the fallout in dairy prices goes deeper than the current generation. He farms in California, where he operates RuAnn Dairy, one of the world’s largest registered dairy farms.

“This crisis that we’re in right now and how we solve it is as much about who and what controls our future, and our dairy industry, as it is about the prices and the current situation,” Maddox said. “Either the dairy farmers are going to control the industry and manage our supply and set our prices, or the processors and the large companies.”

Maddox said a dairy farmer is typically losing $3-$4 a day per cow, or $100 per cow per month. Farm equity is being turned into bank loans, and farmers are exiting the industry altogether, by choice or by force, and a few have exited by suicide, he said.

The meeting was organized by Ohio Farmers Union and a host of local sponsors in hopes of gathering more producer perspectives and educating farmers and consumers about the dairy industry.

New York dairy farmer John Bunting discussed the impact to the market of dairy processors and marketing cooperatives, as well as imported milk protein concentrate.

The country imported about 16 million pounds of milk protein concentrates in 2008, according to information Bunting compiled from the U.S. International Trade Commission. That’s up from 2007 imports of 14 million pounds, and 2006 imports of about 12 million pounds.

Milk protein concentrate is the industry term used to describe a form of processed, dried milk used in foods such as processed cheese products, macaroni and cheese, protein bars, nutritional drinks, candy bars and cookies.

Bunting is one of a growing number of dairy farmers who say imports are partly to blame for their struggles.

But not everyone agrees.

Maddox said imports are a factor but the industry is ultimately experiencing woes because of an imbalance of supply and demand.

“You can blame all the other things, but it all gets back to supply and demand; it’s economics 101,” Maddox said.

He is an advocate for the Dairy Price Stabilization program, a newly formed effort to stabilize the market through a mandatory, self-funded growth-control program.

Producers would be required to contribute less than 2 cents per every 100 pounds of milk they produce and would reap the benefits of a stabilized market, with less volatility and more balance between supply and demand.

“What it (stabilization plan) really does is, it changes the concept of how we market milk,” Maddox said. “It’s economics 101, the law of supply and demand. When the supply exceeds demand, the prices go down, when the demand exceeds the supply, the prices go up.”

Maddox said the program would maintain itself, complementing or replacing the need for government support. Even as a large farmer, who milks 3,600 head and farms more than 10,000 acres, he spoke critically of government-supported agriculture and farm subsidies, likening them to a farmer’s welfare payment.

“My grandfather said we (Maddoxes) were dirt poor, but we were never dirty, we were hungry, and we were never, ever on welfare. Why should I take the welfare as a dairy farmer, I don’t want to be on welfare,” he said.

Bunting and Maddox agreed about the need to educate farmers and consumers about their industry and the need for better prices.

“More than anything else we have a desperate need for transparency,” Bunting said. “The average farmer does not know how the milk in his tank is priced … I think you would walk down the halls of Congress and not find a representative in either the Senate or the House that can satisfactorily explain how farm milk is priced.”

Questions were asked and answered following each presentation.

Barbara Lumley, a dairy farmer and writer from Carrollton, commented on the food safety concerns of imported milk and said women need to be educated most, because they’re usually the ones buying groceries.

“There are so many of them (consumers) who have no idea what milk protein concentrate is, they have no idea how many foods that it’s in and they have no idea that farmers in foreign countries don’t have to meet the health requirements that we do here in the United States,” she said.

Lumley said she also is concerned for the future generation of dairy farmers and whether they’ll even be able to enter the industry. She encouraged other farmers to take the message to their leaders and make their problems be known.

“Dairy producers are going to have to raise hell, you’re going to have to let your politicians know how you feel,” she said. “You’re going to have to write letters, you’re going to have to contact people, you’re going to have to do the necessary things to draw attention to our problem.”

And the problem goes beyond the dairy industry.

Roger Baker, a crop farmer who runs Baker’s Acres in Wayne County, said he sells feed to dairy farmers who are not generating enough income to pay their bills.

Baker said he’s trimmed the cost of feed he sells to dairy farmers because he understands the relationship they share.

“It’s in my best interest as a grain and hay farmer to see the dairy farmer succeed because if he succeeds then I succeed, if he fails then I fail.”

6 Comments on “Ohio Meeting Discusses Milk Market”

  1. The price of milk needs to be lower to consumers. Instead, the processors and retailers are getting high profits at our expense. If the price was dropped in the stores, the excess on the market would have been off the market in a short time. That is economics 101, the supply and demand curve. Perhaps there needs to be some regulations along those lines. We all need immediate action to survive, maybe this could be a first step. Thank you for your attention.

  2. The price of milk needs to be lower to consumers. Instead, the processors and retailers are getting high profits at our expense. If the price was dropped in the stores, the excess on the market would have been off the market in a short time. That is economics 101, the supply and demand curve. Perhaps there needs to be some regulations along those lines. We all need immediate action to survive, maybe this could be a first step. Thank you for your attention.

  3. The price of milk needs to be lower to consumers. Instead, the processors and retailers are getting high profits at our expense. If the price was dropped in the stores, the excess on the market would have been off the market in a short time. That is economics 101, the supply and demand curve. Perhaps there needs to be some regulations along those lines. We all need immediate action to survive, maybe this could be a first step. Thank you for your attention.

  4. Actually, milk prices for dairy producers have not represented market cost since the New Deal. Any increase to consumers has been on the side of processors and retailers (as you rightly said). What should be done is a mandate for INCREASED market prices for dairy and controls placed on price inflation by distributors. Decreasing the price for consumers alone would only further decrease the market price paid to farmers and exacerbate the current problems.

    Perhaps we need more than economics 101 to address this…

  5. Actually, milk prices for dairy producers have not represented market cost since the New Deal. Any increase to consumers has been on the side of processors and retailers (as you rightly said). What should be done is a mandate for INCREASED market prices for dairy and controls placed on price inflation by distributors. Decreasing the price for consumers alone would only further decrease the market price paid to farmers and exacerbate the current problems.

    Perhaps we need more than economics 101 to address this…

  6. Actually, milk prices for dairy producers have not represented market cost since the New Deal. Any increase to consumers has been on the side of processors and retailers (as you rightly said). What should be done is a mandate for INCREASED market prices for dairy and controls placed on price inflation by distributors. Decreasing the price for consumers alone would only further decrease the market price paid to farmers and exacerbate the current problems.

    Perhaps we need more than economics 101 to address this…

Comments are closed.