Fixed “broken” milk pricing system • Missouri Independent
An Iowa dairy farmer on Wednesday appealed to a US Senate subcommittee to help fix a “broken” milk pricing system that she said has worsened conditions in an era of financial uncertainty.
Christina Zuiderveen, managing partner of Black Soil Dairy LLC and industry leader, said the federal milk marketing ordinance system “has promised dairy farmers that if their milk is as good as that of their neighbors, they will be paid the same price ”.
“But after decades of declining fluid milk sales, that promise appears to be broken,” Zuiderveen told the panel.
She said her family had recently prospered under the rules, focusing on selling milk for cheese production last year. They even paid off some of their debt and expanded their operations during the coronavirus pandemic, as cheese prices skyrocketed.
But she wants to see the system change to stem a long string of dairy closures over the years.
“Although these conditions have personally benefited me last year, I have advocated for change because I want a fair system where everyone can compete on an equal basis,” Zuiderveen said. “Our prices are definitely not uniform,” a fact that was confirmed by the operations of his family members in California, Indiana and Michigan. It’s a national issue, Zuiderveen said.
Zuiderveen said the federal system does not provide market-based incentives to move milk to processing plants where it is more valuable. And there is a tension between supporting cheap powdered milk and fluid milk.
“Good intentions, distorted system”
“The good intentions of creating a system with uniform prices resulted in a warped system that is now falling apart, to the detriment of dairy families whose incomes depend on the value of a mixture of liquid milk, powdered milk and butter. “Zuiderveen said.
The federal system is forcing dairy farmers to face a changing economic landscape in which they are unsure whether the price of their milk will be based on the market for cheese, butter or powdered milk, Zuiderveen said.
The federal government must change the system, either through rules or through the next Farm Bill to encourage competition among dairy farmers and avoid fostering consolidation, she added.
Senator Patrick Leahy, D-Vermont, said his region has lost 40% of its dairies since 2012. Leahy noted that he and US Secretary of Agriculture Tom Vilsack last week announced aid of 350 million dollars to dairy farmers due to market oddities during the pandemic. The tensions sometimes included the closure of school lunch programs.
“We look forward to solutions that improve resilience, increase transparency and resolve long-standing market inequalities,” Leahy said.
Dairies are disappearing
The United States lost 7% of its dairies in 2020, with Wisconsin, Minnesota, Pennsylvania and New York being the most affected, Lancaster Agriculture reported. Missouri ranks 26th in dairy production.
Lowell Davenport Jr., owner of Tollgate Farm in New York City, said in 1986 that there were 250,000 dairies in the United States and the average farm had 43 cows. In 2020, there were 32,000 dairies with an average of nearly 300 cows each.
Any consolidation in the dairy industry, unlike the pork and poultry industries, has come from the bottom up, Davenport said.
“Dairy farmers are trying to capture more of the dollar from consumers,” Davenport said. “People in the dairy industry more knowledgeable than me are fighting over ideas to reform milk pricing. The system used by the (US Department of Agriculture) will work. That takes time. We just need to be vigilant to watch what is going on and make sure it benefits those who have the hardest work – the dairy farmers. “
Robert Wills, president of Cedar Grove Cheese Inc. and Clock Shadow Creamery LLC in Plain, Wisconsin, runs two cheese factories supported by 28 dairy farms. “Today I fear for the future of the dairy industry,” said Wills.
Wills said the federal government’s well-intentioned milk pricing system has now gone sour, raising prices paid by consumers while paying farmers less for milk.
There is more, said Wills. “External pressures show how the system threatens the sustainability of dairy farming in the United States. Today, the dairy industry faces increased international competition, rising costs and uncertainty related to climate change ”and the threat of dairy products from genetically modified microbes, he added. .
“The survival of the dairy industry depends on your decision to end rigidities in the market system as soon as possible,” said Wills.