More on Dairy Markets

Here is a letter from an outstanding ag writer that explains amazingly well what is going on with farmers in the Northeast and surrounding states losing their milk markets. 

It has NOTHING to do with too much milk being produced on local NY farms and everything to do with manipulating federal rules to make big bucks, with no concern for what the local economy loses when farms go under.

If you are interested in how milk marketing works, you need to read it. Heck bookmark it, as I did, for future reference. The way our food is handled matters.

Unrecognizable

When the shouting is over, whatever will serve as a Farm Bill is finally in place, and the dairy industry shakes itself out of this particular set of doldrums, I don't think you will recognize it any more. There are big, big ideas being sneaked into print in magazines and the agendas of meetings to get us used to some things that are not going to be good for us in the end. Extended shelf life will make all things possible....China is working hard to get their dairy industry off the ground. I am here to tell you there is speculation about importing dairy from China going on in high places. If that doesn't worry you.....

Between editorials I read, to which I won't link today because I don't even want to give them that much credibility, and what we are hearing from government officials, things look beyond grim. Certain editors and powerful officials want dairy farmers to accept the lowest possible prices and a do-over of both the Federal Orders and standards of identity for dairy products in order to keep people drinking milk. Of course people consume lots of milk in the form of cheese yogurt etc. but fluid milk sales give them a stick to whip us with so.....

I entirely agree that new products and new ways of serving dairy are good concepts and the pricing system is a mess, but blaming farmers for wanting to be able to make a living selling milk is ridiculous. I read years and years ago...before I was even a dairy farmer...that our own increases in efficiency would eventually kill us. That may be coming to fruition now.

As an industry we are walking away from the discussion leaving the health benefits of milk over other beverages on the table, and crying about prices being too high for consumers instead. Where are the comparisons between the price of a gallon of bubbly sugar water (soda), or even just plain water drawn from the tap and put in a fancy bottle, and a gallon of healthy, vitamin and mineral-rich, protein-filled milk? Where are the comparisons between the value of each of these to a healthy diet?

I can answer that question. They are on Facebook and Twitter being shared among farmers. Preaching to the choir. 

Why is someone at DMI, which spends our mandatory check off dollars, telling us that we must accept lower prices and doctored up milk products, when they are supposed to be promoting the value of milk in the diet? That is a real puzzle. They claim to have our interests at heart, but they want to get away from the gallon jug. I wonder.

It has gotten so many farm magazines are no more than mouth pieces for processors. I shudder to think that the folks whose salaries are taken right off the top of our milk checks to pay for "promotion" are thinking the same way. I am almost glad to be at the end of a career in this industry rather than at the beginning.

Yogurt Summit CAFO Regulations/Class III Futures

NY Governor Andrew Cuomo announced changes to the CAFO regulations that may help the state's dairies meet new demand for milk for yogurt. Although a good portion of NY milk goes to the fluid market, any changes that enhance the business climate for dairy farms are very welcome.

And some interesting news from the CME, where dairy prices go to die. Class III futures explode

Judge Denies Dairy Farmer Suit

You probably have to have a dog in the fight to be interested in what is going on here, but this is pretty big news on the dairy farm scene.

The Christmas Tree Tax

Was in fact not a tax and was never intended to be one. It was a checkoff program. Checkoffs are producer funded and driven generic advertising programs intended to increase sales of various farm products. Christmas tree growers wanted to get on board with this concept to help real trees maintain their market share against artificial ones. Here is a pretty good story about it.

Such programs are common among various commodities. Here is a bit on the soybean checkoff which explains some parts of the concept.

There is a beef checkoff...a buck a head for every cow or calf sold for beef in the nation. Beef, it's whats for dinner, is an example of the resulting advertising campaigns.

There have been times when that beef checkoff has really ticked me off. Say when calves are bringing five bucks and out of that you pay the checkoff and commission and get nothing back at all. However, all those new cuts of beef you see, flat iron, etc....developed and promoted with beef checkoff dollars, in the interests of making beef more appealing. Plus lots of recipes and other programs are thusly funded.

There is a dairy check off too. Fifteen cents per hundred pounds for every bit of milk that leaves a dairy farm. We do not get to pass that along to consumers either, because our price is set by government formula, which does not take it into account. If it is in any way a tax, it is a tax on us, not on the folks who drink our product.

It has also irritated me on occasion, such as when it spent our money to help the EPA fund air quality studies on dairies. Seemed dumb at the time and seems even dumber now. However it also funds the wonderful Dairy Princess program and partners with grocery stores to better display our products, schools to convince students to drink it, and restaurants to use in new offerings to keep folks using it in drinks and as cheese on burgers. Here is a link to the local "chapter".

All three of the Northview crew served as dairy ambassadors on various Dairy Princess courts. They learned a great deal and spent a lot of time at various public affairs meeting consumers face to face and explaining about the value of dairy products in the diet. It was good for them and good for the industry. And it put faces on farmers in a very real and personal way for thousands of non-farm customers.

I have been appalled over the past couple of days by the sheer ignorance of some pundits on the topic of the Christmas tree checkoff. They are to be excused for not understanding the whole checkoff concept when the furor began. They are not to be excused for not doing their homework before they sounded off. I give them an F in research.

I am kind of on the fence on the whole checkoff concept though. It makes for splashy advertising and in the case of the dairy and beef checkoffs has come up with some really popular campaigns. However, it has pretty much been proven that such generic advertising has very little benefit for individual farmers and when it gets down to the nitty gritty that is who is paying for it.

Delta Smelt and Dairy

This is many, many times larger than a delta smelt, but IS a minnow, a fall fish

Prominent California dairy blogger, Dino Giacomazzi is doing a solid month of posts on his dairy blog, emphasizing answers to questions from readers.

He was kind enough to answer my question about the economic impact of government water regulations in his state on his dairy business. These environmental rulings are turning some of the most productive land in the nation into a dust bowl in the name of a tiny fish, which wouldn't even provide a snack for the fish above. I have no doubt that even if you aren't aware of it, you feel the impact of this situation every time you buy fresh produce at the grocery store.

Read his excellent answer here. And if you have a question for Dino, he is ready and waiting to answer yours too.

Price Takers, Not Makers

Here is an excellent article on the ongoing loss of large numbers of dairy farms, with some interesting suggestions for solving the problem.

And here is a story about one particular farm selling out.