CWT Doubles the Assessment to Battle Market Imbalance

Andy VanceDairy Business, Dairy Group

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The farmer-driven supply/demand self-help program Cooperatives Working Together is increasing its voluntary assessment rate to better combat a surge in milk production. The CWT committee, composed of leaders of the participating cooperatives, voted at its meeting this week to raise the assessment from the current 5-cent per hundredweight level to a 10-cent per hundredweight contribution. At the current assessment rate, the CWT budget doesn’t have enough juice to carry out another round of herd retirements, the key function of CWT in boosting milk prices by limiting supply. Milk production went up 3.5% in 2005, and is continuing the surge into 2006. While the current budget level would allow the export assitance programs of CWT to continue, the co-ops agreed that fewer cows producting milk is really what the industry needs to light a fire under farm-gate prices. CWT’s 49 member co-ops represent over 74% of the nation’s milk supply.