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Export or perish: Do you believe it?

PD Editor Walt Cooley Published on 16 March 2011

As is tradition with our annual State of the Dairy Industry issue, the cover of this issue was drawn by an industry stakeholder. In this case, she is an important one and represents the primary audience of this magazine – dairy producers.

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As is tradition with our annual State of the Dairy Industry issue, the cover of this issue was drawn by an industry stakeholder. In this case, she is an important one and represents the primary audience of this magazine – dairy producers.

Dairywoman Caryl Peck of Wisconsin drew the dollar bill illustration and wrote the caption for it late in 2010. It was a time when markets had yet to show that early 2011 milk prices would rise and remain firm.

Yet even with higher mailbox milk prices today, I know margins are still thin and that recovery from 2009 is years away. And so most producers would probably still agree with her statement: We need more money for dairy products.

That’s not just fluid milk as depicted on the cover. It’s all forms of dairy-based refrigerated products found in domestic supermarkets and ingredients being shipped across the world.

In this issue is an article about the most frequently asked questions dairy producers have about global dairy export markets and our country’s now nearly assured pursuit of them. Yes, we could choose to limit or scale back production to not supply 12.8 percent of our solids production overseas.

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That choice would probably require the installment of strict quotas to limit our current free market. Most producers would not choose to cut their own production by the more than 10 percent decrease that would be required to become a “domestic-only” market.

As I heard recently, it’s now export or perish for the U.S. dairy industry. I would propose that we’ve passed the tipping point where the collective growing pains and work that will be required to continue to align U.S. processing capacity to make dairy products at world specifications, better market them and thus capture more value for the products we sell to the world is less than the individual pain that would be incurred to cut back production and recede all of us into an isolationist national dairy policy.

I think more and more producers are seeing the facts about exports in this way. If not, click here to see answers to the questions you still probably have.

That collective pain as we embrace our new role as an up-and-coming world supplier is manifesting itself in the form of sincere discussion about dairy policy reform. There have been several updates on that front. ( Click here .)

Individual representatives are beginning to enter the fray, and counterpoint arguments to all new facts are becoming more frequent. If you’re not just a spectator in the debate, it’s an exciting time. PD

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