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Dairy producers protest milk prices

About 150 turn out for Iowa meeting

May 31, 2009
By LARRY KERSHNER, For the Messenger

MANCHESTER - About 150 people, most of them dairy producers, gathered Saturday at the Manchester Livestock Auction building to protest current milk prices, which has declined 45 percent over the past five months.

Saturday's speakers said that if the U.S. Department of Agriculture fails to set a base price for milk, then the U.S. will lose 25 percent of its dairymen.

On hand were area and regional dairy producers and suppliers, as well as producers from New York, Pennsylvania, Wisconsin and Illinois, and representatives of national and state agriculture organizations.

Event organizer Jerry Harvey, of Russell, in Lucas County, said he is not a politically oriented person.

"I am a frustrated farmer, like most of the other guys out here," he said.

Harvey said that most independent dairymen have been borrowing $4,000 to $5,000 monthly to cover operating costs.

"We did that just until this thing turns around," he said. "But it's not turning around. It keeps going on. All of us have cut back on feed, which lowers our production, and we've culled our low producers. We are told to keep cutting production, but that's hard to do when your income is already cut in half."

Harvey said he had restructured all of his debt last month to try and get closer to a break-even point "and I still came up $3,000 short." He said his situation is typical among dairy producers throughout the country.

Saturday's gathering was held to call for passage of Senate Bill 889, introduced this year by Sen. Arlen Specter, D-Pa., and Sen. Bob Casey D-Pa., calling for the U.S. Department of Agriculture to set milk prices based on the cost of production.

On hand Saturday was the author of the bill, Arden Tewksbury, of Meshoppen, Pa., who is manager of ProAg, an organization based in Amarillo, Texas, with an office in Des Moines. Tewksbury said the bill simply calls for the price of milk being closely aligned with the cost of production.

The bill was originally introduced into the Senate by Specter and Casey in 2007, but was not moved out of committee by the Agriculture Committee chairman, Sen. Tom Harkin, D-Iowa. The bill was recently reintroduced into the Senate. According to Tewksbury, Harkin and other senators have already said the bill doesn't stand a chance against the lobbying of "Big Milk."

"If this bill had been passed and in place," Tewksbury said, "producers would have received $25 per hundredweight" when production costs were at $24/cwt.

Dairyman Harvey said they producers right now need $16/cwt to break even, and are now receiving $10/cwt.

Another Iowa speaker, Francis Thicke, of Fairfield, who operates an organic dairy and has filed to run for Iowa secretary of agriculture in the next state election cycle, said the free market in milk has disappeared since companies like Dean Foods in Horsham, Pa., and Dairy Farmers of America, the country's largest dairy cooperative, that includes Hiland Dairy and Roberts Dairy, together control 40 percent of the country's milk production.

"When this happens," said Thicke, "the free market is lost." In addition, he said DFA has 12 import licenses.

"Why does a cooperative, that is supposed to help farmers, need to import milk?" Thicke asked.

He answered his own question saying that by bringing in foreign milk, the quantity can be used to show an over production of supply and thereby bring down the domestic price of milk.

Thicke described the current price of milk as an asymmetrical scale. If producers get more for their milk, the cost rises in the grocery store. But when the price to producers falls, the cost of milk in stores comes down slightly, if at all.

"Then when producers get more again, the cost of milk goes up with it and it gets very uneven," Thicke said.

Chris Petersen, of Clear Lake, Iowa president of the National Farmers Union, said "I've read about the suicides and the financial pain and enough is enough. Farmers need a price for their products and consumers need a good product."

He accused corporate dairy operations of rigging the pricing system against independent producers. "This isn't capitalism," Petersen told Saturday's gathering. "It's corporate socialism."

John Crabtree, representing the Center for Rural Affairs, based in Lyons, Neb., encouraged those listening to contact U.S. Secretary of Agriculture Tom Vilsack to implement a base price to keep dairy operations in business.

Contact Larry Kershner at (515) 573-2141 or by e-mail at kersh@farm-news.com

 
 

 

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