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What direction should Idaho Dairymen’s Association be taking?

Published on 27 April 2010

On March 31st a meeting was attended by over 160 individuals representing 87 dairies with just under 260,000 cows to provide input into how dairy producers in Idaho want their organization to address the current ongoing dairy crises.

The economics of the dairy industry is like any other industry; if supplies outpace demand, the price will go down; when supplies are short, price will go up. The question lies in how to control supply. Everyone realizes that if producers fail to make a correction in the supply/demand equation, the market place eventually will. In 1980 there were approximately 225,000 commercial dairy operations in the United States; 30 years later we are down to less than 57,000. The market place has made the necessary adjustments to keep supply and demand in balance, even with all of the current government programs.

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The meeting focused on supply management through mandatory participation which involves the government participation or voluntary programs which will always have “free riders” taking advantage of the efforts, similar to the current problems with CWT.

Adrian Boer, a producer from Jerome, Idaho who serves on the Board of Directors of Northwest Dairy Association and also National Milk Producers Federation (NMPF), presented information from a national perspective. There are multiple programs that NMPF is currently working on.

Adrian did point out additional benefits of managing supplies such as: stabilizing property values, controlling and managing the heifer population, reducing the fluctuation in cow values and eliminating current government support programs.

The meeting continued with examining voluntary programs that utilize Marketing Agencies in Common (MAC’s) that are utilized successfully in other regions of the country. Examples such as Oregon’s Milk Marketing Federation and the Southwest Milk Marketing Agency, in which dairy cooperatives form a MAC to enhance dairy prices and the coordinated efforts increase efficiencies, particularly in hauling. Unlike those areas, Idaho has the vast majority of its milk not marketed through cooperatives.

The concept of a MAC could be utilized to form a supply MAC where supplies could be controlled by a producer-elected board to determine the volume of the reduced production and the duration that the restrictions would be in place. One item that was obvious is that this is a national issue, not just an Idaho issue. Can it be done? Sure, the Capper-Volstead Act provides the protection for producers to work together to determine supply levels and other items that impact pricing. The current pricing dilemma should provide all the incentive that is needed for producers to organize a MAC in Idaho. Can Idaho go forward alone? Probably not, but there will be little interest in other areas to control supplies voluntarily if Idaho is on the sidelines. There were multiple points of discussion that covered all aspects of voluntary versus mandatory, capitalism versus socialism and the concern by producers who also raise other agricultural commodities that production is regulated – “to be careful in what we ask for.” With government involvement the end product might not be the product we desired.

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Another issue that was examined was the current status of NMPF’s Cooperatives Working Together (CWT) program. There was a long discussion of renewing efforts to get the participation in Idaho to its previous levels. The discussion centered on the view that a new voluntary program would take longer to develop than most producers would want. A national program is long term with a difficult path to get a unified industry behind any of the proposals. With little hope of opening the current farm bill to address the issue, it would be 2012 – 2013 before any changes approved in the next Farm Bill would be reflected back on the dairy.

Moving forward, IDA will work with both the Western States Dairy Producer Trade Association and NMPF to work towards solutions. Below are a few of the membership- approved policies that will guide us in those discussions.

The membership of Idaho Dairymen’s Association over the years has developed a policy book with numerous positions that make it clear that less government intervention in agriculture is in the best interest of the dairy industry. At the November 2009 annual meeting, dairy producers passed the following statement regarding milk marketing:

“Idaho Dairymen’s Association, Inc. believes in and encourages its members to participate in milk marketing efforts that serve the best interests of all Idaho dairymen.

“Any position taken by Idaho Dairymen’s Association, Inc. or its officers shall not jeopardize or interfere with the ability of any individual dairyman to better himself through separate action unless such action is determined to be detrimental to the Idaho dairy industry.

“Even though our policies listed below reflect that we believe it is in the best interest of all agricultural commodities for the government to withdraw price support mechanisms that create price floors, caps supplies or creates artificial demand for agricultural commodities, the Idaho Dairymen’s Association believes that it is in the best interest and essential for the profitability of dairy producers to provide leadership that develops and maintains unity within the national dairy industry. Recognizing that eliminating government programs from agriculture is a long-term process, the IDA will work with state, regional and national organizations to facilitate unity within the dairy industry while working within the existing and proposed government programs put forward to ensure the long-term financial health and stability of the Idaho dairy industry.”

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On Supply management programs, the membership also at the November 2009 annual meeting approved the following position: “Idaho Dairymen’s Association, Inc. supports industry controlled and voluntary industry funded supply/demand management programs. The IDA will oppose all government mandated supply/demand programs that have not received support from a supermajority vote by individual producers.” In addition, a policy was also approved objecting to block voting on government referendums by cooperatives.

Even though we are still in very difficult times, the results of the survey found [conducted at the meeting] still indicate that if there was going to be a supply management program, it should be voluntary – with an overall indication that it would be strongly suported, as CWT was initially. PD

Excerpts from Idaho Dairy Focus, April 2010

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