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Thursday, February 02, 2006

We attended a very unpleasant meeting today. The independent cooperative where we have marketed our milk for quite some time is being taken over in a hostile manner by a larger one. We have been selling some of our milk to their cheese plants and they say they won't take any more if we don't join them. Shades of the big coops, the bullies of dairy farming; that is how they are taking over the industry. What a shame to see the "independents" playing the same game.

They are offering us a very substantial cut in payfor the privilege of selling our milk to them. Where the coop we now ship to has one of the most competitive quality premium structures in the region, this new bunch is so restrictive that basically they offer no premiums. Quality premiums are one place a conscientious farmer can make a few bucks. Here at Northview we have qualified for awards every year since we took over the farm and make the highest possible premium more months than not. We would not qualify for ANY from the new guys. The only carrot the new guys are offering is a place to ship our milk. That's it, just a market, but a lot less money. Our old coop only marketed milk, so they took no equity. The new guys own four plants and take a whole bunch of nickels here and assessments there that look to me to equal over two bucks less a hundredweight if you figure in premiums. Which, of course we do figure in, as they have been enough to pay for our quality program here. DHIA, sanitation, etc. has pretty much all come out of the premium check.

It is pretty worrisome and the only guys who like it are big producers, who will get volume premiums, which will make up a little bit of the loss in quality payments. Of course we are far too small to get those either. From our point of view there is now little to choose from between continuing to sell regionally, or just biting the bullet and joining another, even bigger, monster coop that everybody loves to hate. It comes down to a lose/lose or just sell out situation. Dang.

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