Dairy Foods & Beverages / Dairy Foods Columnists / Milk / Sales Data

Opportunity - A New Way of Looking at Our Industry

November 11, 2011
KEYWORDS IDFA / prices / regulations
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It’s hard to be optimistic with so many fundamentals in disarray — millions are out of work, the stock market gyrates daily and our President and Congress seem incapable of reaching agreement on ways to change our course or to even send a message that stability and hope lie ahead.

In the dairy industry, we see great market opportunity but grapple with how to get out of the policies of the past that hold us back. Whether it’s the economy, jobs or dairy policy, we need leaders who will follow strong principles to get us back on track rather than those who want to simply gain an advantage from the moment.

Yes, I realize there are differing points of view in all of these issues, but the fundamentals for dairy are pretty clear. The role for government should be smaller — at best providing a safety net for farmers in dire circumstances and setting the stage for better risk management by farms and businesses. The intrusion of government in dairy pricing and markets must end for us to be successful in capturing and keeping new markets. These fundamentals should be pretty clear to anyone in the dairy industry. We have multiple policies that were intended to guarantee success, but, sadly, we realize that that is a promise government cannot fulfill.

Clinging to complicated government systems, such as Federal Milk Marketing Orders, to manipulate winners in the marketplace is a losing proposition.

Eliminating federal pricing is not about helping or hurting dairy farmers. It’s about creating a successful market situation for milk and other dairy products, so that all segments of the industry have the opportunity for success. Yes, the opportunity. Neither the federal government nor the industry should design policies or systems that guarantee the success of some, but we need to remove the policies that are impediments to the opportunity for success for all. This is how I see our best opportunity for a bright dairy future. Indeed, it’s a new way of looking at our industry and its relationship with government.

Some predict doom and gloom without government interference and involvement in our markets, but for most, it’s more about the comfort of retaining the way we’ve always done things and the fear of what change might bring. And I grant you, analyses of the future based on the facts from a government-dominated past make it hard to know with confidence what that future will look like. But, I believe our industry can thrive and do well unaided by the government.

Optimistic about dairy’s future

Political jockeying for advantage through government programs is a long-learned and hard-to-break habit, but the entire dairy industry could be so much more effective, innovative and successful by replacing the shackles of government mandates and market interference with creativity, entrepreneurship and competition.

And, that’s precisely why I remain optimistic about the future of dairy, even with the uncertainty that pervades the economy and the nation. Our industry has continued to slog through the tough times with unbelievable fortitude and perseverance. Just think what we could accomplish with the right policies in place.

The findings of the globalization studies commissioned by the Innovation Center for U.S. Dairy and conducted by Bain & Co. provided a roadmap for success in the U.S. dairy industry. The 2009 report, “The Impact of Globalization on the U.S. Dairy Industry: Threats, Opportunities and Implications” and this year’s companion, “Dairy Globalization Refresh: 2011 Update” show clear promise of welcome relief from the rugged terrain we’ve been navigating lately.

The initial research showed and the update reaffirmed that the global demand for dairy products will exceed supply in the near term, and that the United States remains uniquely positioned to become a consistent exporter. Both reports make it clear that the U.S. dairy industry may only grasp that opportunity if dairy policies are streamlined to better fit with global markets and provide incentives for growth and innovation.

I am optimistic that the dairy industry can continue to be a strong economic engine for our country. All we need — and look forward to — is the opportunity for success.

Dairy Foods seeks essays from dairy processors. Send your ideas to carperj@dairyfoods.com.

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