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.
This is the most balanced and accurate article I have read so far on New York's so-called yogurt "boom". The author should be complemented on his excellent research into a complex topic. People who don't understand the way milk is priced have been expecting farmers to be all excited about this new market for their product. Instead, far from expanding to milk more cows, dozens are simply giving up and going out of business. The new market doesn't mean any more money in their milk checks and it doesn't lower the record high energy and feed expenses they are facing. It's okay not to understand milk pricing, by the way, because it is so ridiculously complicated as to have been written in hieroglyphs that have no key. However, the author of this article spoke to farmers and industry members who do get it, and they made the situation as clear as possible. If you have time, read the whole article for excellent insight into what is going on with NY milk production and all the new yogurt plants.
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.
This story kinda got mine. 2009 was one of the worst years for dairy farmers.....ever. We all burned through way too much equity trying to somehow stay in business. Many of us have not begun to dig out of that hole even now. I am not sure the author intended to suggest that we should enjoy prices that low if they increase fluid consumption, but I sure hope not. Also fluid milk is far from all of the milk marketing story. For one thing our price is based on cheese sales on the CME. Cheese consumption has climbed steadily over the past decade, while prices fluctuated all over the place. And notice the suggestion of shelf-stable milk there? I see that trend as a way to import a lot more milk, displacing a lot more domestic milk from the market. Components brought in under all sorts of names already displace millions of pounds of domestic fluid milk, contributing in all likelihood to the demise of many family dairy farms. Alternately cheap West Coast milk could show up in our markets quite easily too. If your milk will keep for six months without refrigeration you can move it a l-o-o-o-ng way before it spoils. It's already happening down under. Considering the conditions under which milk is produced in many of the countries from which we import a lot of stuff (remember China and melamine? Their dairy industry is rebounding rapidly right now.) I shudder to think of the future.
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
Posts
