Current Progressive Dairy digital edition
Advertisement

Coalition builds ‘Cornerstones for Change’ in milk pricing

Sarah Caldwell Published on 27 April 2011

“The milk pricing system is really complicated,” said Sherry Bunting, corresponding secretary of the Dairy Policy Action Coalition (DPAC). “The more complicated it is, the easier it is to hide a lot of things.

Producers flat out just don’t have a basic trust in the system that’s pricing their milk.”

advertisement

advertisement

DPAC, a grassroots coalition focused on influencing milk pricing policy, is ready to change the system. The group recently developed “Cornerstones for Change,” a one-page document that details the policies they would like to see changed in the current pricing system.

“We want to know we’re producing for the market, we want to be priced into the future and we would like to have a feeling that our price is competitive,” explained Cliff Hawbaker, chairman of the DPAC board and a dairy producer from Chambersburg, Pennsylvania.

DPAC started in November 2009 in the Northeast, after several groups of dairy farmers began holding meetings across Pennsylvania and Ohio about dairy pricing.

The meetings were informative and action-driven, often including the area’s congressman or congresswoman so that he or she could take the dairy farmers’ message to the federal level. Although the coalition started in the Northeast, it quickly grew to a national level.

“This is not just a Pennsylvania or Ohio issue,” Hawbaker said.

advertisement

DPAC is now working with the Southeast Dairy Coalition, as well as groups in the Midwest, to coordinate on national issues.

“We would like to see dairy policy go forward in a way that is unified but also sensitive to different regions,” Bunting said.

The coalition understands that different regions have different advantages and needs. Therefore, one of the Cornerstones focuses on encouraging market development and competition on global, national and regional levels.

“What is the advantage for a farmer in his particular area?” Hawbaker asked. A new policy “opens up a beautiful opportunity for world markets.”

The coalition is intent on simplifying the milk pricing system. One idea is to reduce the number of milk classes from four to two.

“Because of our four-class system, our blended price is below the world price right now,” said Hawbaker. “When we have multiple classes, it causes confusion both on the processors’ side and the farmers’ side.”

advertisement

Although the committee has not made any specific decisions or recommendations on a supply management program, they do agree that a supply management program should not be layered on top of an already broken system.

“It would send the wrong message to our trading partners and to the dairy industry as a whole,” explained Dennis Wolff, partner in Versant Strategies and public affairs representative to DPAC. “The way the dairy industry will be establishing and developing strong global markets for our product – supply management just doesn’t fit into that concept.”

Instead, DPAC believes greater market development could create its own supply management program. If farmers produce for their particular market, for a fair price, and the market requires less than what the farmer can produce, he or she can find another use for it.

“You can make your own cheese; you can drink it; you can feed it to the pigs; you can do whatever you want with it,” Hawbaker said.

The coalition is also arguing for greater price discovery, including better and faster reporting of prices. They are pushing for daily reporting of prices instead of the current system of monthly reporting, which would undoubtedly be beneficial for budgeting methods, especially for beginning producers, said Hawbaker.

“Pricing into the future is one of the things I hear the most from guys and gals coming out of college,” Hawbaker said. “They want to start farming, but they can’t put a number down. The contracts are market and below because no one wants to risk it.”

DPAC is hopeful for the changes they suggest. They developed a draft proposal for the changes dairy farmers want and are currently looking for a champion in the House or Senate to put their proposal in the form of a bill.

While some of the current programs will be modified or left alone, others, such as the Dairy Price Support Program, have outlived their usefulness, says Wolff.

“It is such a complex, complicated policy that those few that understand it in the industry have quite an advantage,” Wolff said. “That’s not always the dairy farmer.”

“I wish it could get to the place where one farmer could tell another how milk is priced,” Hawbaker said. “We have the opportunity right now to influence the way we market milk.”

Laura Covert, a board member from New York, is passionate about DPAC’s mission, even though she is not a dairy farmer herself.

“There’s never been another organization that I’ve seen that I’ve felt so strongly that I needed to be involved right then and there,” Covert said.

To learn more about DPAC or get involved, visit their website: www.dpac.net . The organization is unique in the fact that no fee is required to join, yet donations are welcome.

“It’s like a fire company,” says Bunting. “If you didn’t give a donation and you have a fire, they’re still there for you. Every dairy farmer is theoretically already a member.” PD

Sarah Caldwell  
Sarah Caldwell is a senior in agribusiness management and agricultural communications at Penn State University.

LATEST BLOG

LATEST NEWS