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Posts Tagged ‘dairy reform’

By Ryan Dennis

On March 15th, 2011, a member of the European Parliament introduced his report of the European Commission’s “Milk Package” meant to address problems associated with the cause of low farmgate prices.  The Milk Package, by emphasising contractual relationships, aims to even the lack of

Some feel the Milk Package doesn't do enough for dairy farmers

countervailing power experienced by dairy producers in the market, while promoting greater transparency among various links in the producer-processor-retailer chain. As the EU continues to phase out supply management, drafting measures that endorse a properly-functioning market in which dairy farming remains profitable will be a focal point.

Several groups, including the European Coordination Via Campesina and the European Milk Board, have already voiced their disappointment in the package and its proposed amendments, suggesting that the proposed measures will fall short of achieving a fair price for dairy farmers.

The Milk Package, in addition to stressing contract negotiation, also seeks to limit the size of Producer Organisations (POs) that represent dairy farmers. Under the January 11th presentation of the scheme, a single PO will not be allowed to represent more than 33 % of a nation’s production, and no more than 3.5% of EU’s total milk. Countries with larger production, such as Germany, are expected to have 5 to 6 Producer Organisations, while smaller nations will be required to have a minimum of three.

Dairy producers have experienced a lack of bargaining power in, arguable, all forms of milk market schemes found around the word. It is the Commission’s hope that requiring mandatory contracts to be agreed upon between producers and processors in advance to delivery will help ensure the profitability of the European dairy industry. The adoption of the Milk Package is expected to go into effect 2012, and be valid until at least 2020, with two intermediary reviews.

More information about the Milk Package can be found here.

The following has been released by the Pennslyvania Family Farm Defenders:
Meshoppen, PA: As National Milk Producers Federation’s (NMPF’s) “Foundation
for the Future” (FFTF) nears completion as legislation and its benefits are
widely being touted, Pennsylvania Family Farm Defenders (PA F.F.D.) is
concerned that there are serious reasons to believe that the alleged
benefits of FFTF are vastly overstated.

Food and Agricultural Policy Research Institute (FAPRI), University of
Missouri, did an analysis of NMPF’s FFTF program soon after the plan was
released in June of 2010. FAPRI projected that the average price of milk
paid to dairy farmers would be no higher under NMPF’s program, than if
nothing were to be done at all, perhaps even slightly lower.

“Margin insurance” is a key part of the FFTF. Under FFTF, the government,
which everyone knows means “taxpayers,” would provide a base level of
“margin insurance.” According to NMPF’s own graphs, only about nine months
in the last 10 years would have triggered payment in the base program. Any
additional insurance would have to be purchased by the already financially
strapped dairy farmer above the cost share by the Federal Government.
Essentially farmers would be paying for “margin insurance” even though the
average price of milk will not likely increase. Lenders may insist that
farmers purchase this “margin insurance” in order to obtain financing. Small
farms which were eligible for Milk Income Loss Contract (MILC) program
payments on their full production will almost certainly come up short under
NMPF’s program if, as expected, the MILC program which made direct payments
to dairy farmers when milk prices dropped below a certain level, is
eliminated and replaced by the “margin insurance” program.

“Competitive Pricing” when there is little competition in the market place,
is not likely to increase farm milk price since the survey will show what
processors think milk should be worth.

“Make Allowances” would supposedly be done away with, but, in fact,
processors will be figuring their costs into the value of milk, thus having
even more freedom to “cover their costs” than under the current system.

NMPF is comprised of many dairy cooperatives which were established under
the Capper-Volstead Act of 1922. This Act gave co-ops collective bargaining
rights that are supposed to be used to give dairy farmers economic power in
the “marketplace.” By failing to focus on fair prices for their dairy farmer
membership, these co-ops have violated the spirit of the Capper-Volstead

Both NMPF and the Dairy Industry Advisory Committee (DIAC) have failed to
address trade practices that result in lower farm milk prices.

The Pennsylvania Family Farm Defenders rejects the claim that FFTF will
benefit dairy farmers and calls instead for a pricing system that is based
on dairy farmers total cost of production with a common sense supply
management or growth management system that allows young farmers to enter
the dairy business.

The PA F.F.D. is a chapter of the Family Farm Defenders (FFD), a Wisconsin
based organization whose mission is to create a farmer-controlled and
consumer-oriented food system.  FFD has worked to create opportunities for
farmers to join together and forge alliances with consumers while returning
a fair price to farmers.

For milk pricing information based on cost of production please visit There you will find a background for cost of production
and other useful information that highlights the serious challenges facing
America’s dairy farmers and consumers, plus an analysis of NMPF’s Foundation
for the Future. It is time that farmers get informed on what is being done
“on their behalf.”

The PA F.F.D. can be reached can be reached at

The Federal Milk Marketing Improvement Act, also known as Bill S1645 and the Specter-Casey Bill, expired several months ago on the congressional table.  Proponents of the bill are looking for legislative support to get it re-introduced.  LoriJayne M. Grahn and Tina Carlin, both farming wives, are calling on advocates to contact their representatives and senators.  They have issued the following notice:

*******ACTION ALERT*******


Call or email your Senators and Representative immediately for this request. The following is our request to our Senators and Representatives.

*******ACTION ALERT*******


(Formerly S1645)


Dear Senator/Representative ____________________,

In voicing our full need and support as farmers and consumers, we would request and appreciate your sponsorship and/or co-sponsorship for the re-introduction of The Federal Milk Marketing Improvement Act (Formerly known as S1645) thus upon after its re-introduction we would also request and appreciate your vote for its passage into legislation.

The Federal Milk Marketing Improvement Act offers and consists of:

The Federal Milk Marketing Improvement Act (Formerly S1645) IS a solution to fix a broken pricing system that fails us over and over again, leaving us with welfare subsidies and programs that don’t work. The Federal Milk Marketing Improvement Act (Formerly S1645) is a chance and answer to save our farms now and not later.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL stabilize farm raw milk prices and WILL give all dairy producers the average national cost of production determined by the Economic Research Service (ERS) of the United States Department of Agriculture (USDA). The price would be adjusted quarterly.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL create transparency and the S1645 bill eliminates any reference to the Chicago Mercantile Exchange (CME) for determining milk prices paid to dairy farmers. S1645 creates official transparency to report on import/export volume, milk displacement, and dollar value, and create accountability in the Federal Order amendment process. The crime of price manipulation and corruption have been proven that the CME is prone to this abuse.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL balance milk production and supply as the bill mandates that the US Secretary of Agriculture must be sure that the imports of dairy products do not exceed the amount of dairy exports before he can use the inventory management program. In other words, dairy farmers will not be required to balance the national oversupply of milk if the displacement of US milk is caused by import increases; this includes imported Milk Protein Concentrate (MPC) and Casein. Under Bill S1645 importation of foreign dairy products will no longer be allowed to destroy dairy farmer raw milk prices.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL provide a Supply Management program to be implemented only when dairy exports exceed dairy imports by both the amount of milk represented and by dollar value. Bill S1645 Supply Management first phase-would affect all dairy producers by reducing the Class II price by up to 50 percent on up to five percent of their production. US dairy farmers would always maintain at least a 95 percent national cost of production during this process. It would also give farmers a signal to hold production down as well. The intent of Bill 1645 is not to tell dairy farmers how much milk they can produce, however, overproduction and supply are addressed in the Inventory Management Program of S1645, that is necessary to prevent a small amount of milk forcing all milk down in price per hundredweight. Bill S1645 second phase-if necessary under which when the Secretary of Agriculture would announce a reduced price for producers who have increased production on all milk that is excess of the dairy producers preceding years production. The funds collected from the supply management assessment would be transferred to the Commodity Credit Corporation (CCC) to be used to remove excess products from the market.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL reduce government spending and help in reducing our national debt crisis.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL be burden FREE from the tax payers as the bill will be funded by farmers where the cost is paid through supply management provisions. The Federal Milk Marketing Improvement Act (Formerly S1645) cost would be minimal as it uses existing entities such as ERS, Market Administrators, Farm Service Agency (FSA), Foreign Agriculture Service (FAS), where the required data is already being done, or could be done with little additional expense.

The Federal Milk Marketing Improvement Act (Formerly S1645) IS a solution addressing the same roller coaster problems in the industry. Plus the MILC program or price support program, or tax payer dollars government spending.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL be able to be implemented immediately as stand alone legislation upon being voted on and passed by Congress (both the Senate and House of Representatives) and will not require the Farm Bill to be reopened to be put into effect.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL NOT interfere with existing federal and state marketing orders which remain intact and be responsible for determining the component value of milk.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL protect the continuation of the Federal Milk Marketing Orders (FMMO) from being terminated by a negative vote during the referendum process.

The Federal Milk Marketing Improvement Act (Formerly S1645) WILL eliminate Make Allowances, which are any cost of manufacturing plants, to be levied on dairy farmers.

This plan WILL NOT change regional differences except that all manufactured milk will be classified as Class II. The plan does not prevent states or groups of states from setting higher Class I prices. National average cost of production is easier to defend opposed to regional prices for manufactured milk that seemed to prove unworkable  after intense discussion during the draft of this plan. However, fluid prices are more locally or regionally oriented and this would not change with this plan.

The Federal Milk Marketing Improvement Act (Formerly S1645) is a solution to save our dairy farmers with a cost of production, provide a supply management program if needed, address the imports of Milk Protein Concentrates (MPC’s) that displace our US dairy farmer’s milk and creates an oversupply, plus threatens the safety and quality of our food supply, plus it is an ideal bill that will not affect our national debt or cost the taxpayers any money.

To make dairy farmers pay for insurance plans does not solve the problems and only allows a farmers debt to increase.

In conclusion, the farmer’s paycheck is what is left over after everyone else profits or takes their cost first. The roller coaster price system is destructive. Farmers have sacrificed everything and can’t recover their debtload or losses when the checks that they receive are always below cost of production. The corruption, consolidation, and corporate world has been able to control the dairy industry and it’s path. This needs to stop now. Other destructive policies and anti-trust abuses can not be tolerated and are not acceptable. Our country needs it farmers, and the health of our economy and rural America depends on them. US dairy farmers, consumers, and the dairy industry as a whole need The Federal Milk Marketing Improvement Act (Formerly S1645). This is a solution. NO MORE BANDAIDS. There is no excuse for anything less. Our dedicated, good family farmers who provide us with a quality fresh local food supply are going out of business and losing everything.

For more information on the Federal Milk Marketing Improvement Act please visit our website and/or contact us at


LoriJayne M. Grahn, Minnesota Dairy Farmer and Consumer, Pelican Rapids, Minnesota

Gerald Carlin, Pennsylvania Dairy Farmer, Consumer, and Co-author of The Federal Milk Marketing Improvement Act, Meshoppen, Pennsylvania

Tina Carlin, Pennsylvania Dairy Farm Wife and Consumer, Meshoppen, Pennsylvania