The National Milk Producers Federation’s Strategic Planning Task Force met in Chicago to further analyze several proposals intended to offer long-term solutions to the twin issues of low milk prices and extreme price volatility.
The group concluded that more information is needed regarding the ramifications of dairy imports and exports on the efficacy of a mandatory supply management proposal that several dairy industry organizations are promoting. The Task Force also recognized the critical importance of evaluating the unintended consequences that could result from the implementation of such a program. The Task Force further agreed to examine a plan to reform the Federal Milk Marketing Order program by eliminating allowances.
Reflecting a desire to review the most current and complete information available of the impact of globalization on the domestic market, the Task Force was presented with a major research report, conducted by Boston-based Bain and Co., of how the U.S. dairy sector currently fits into the global dairy system, and how that role may change in the future depending on the course of action taken by the domestic industry in the coming years.
“There is strong interest on the part of our Task Force in making dramatic and positive changes in milk pricing so that we don’t have to find ourselves in the same position again in the future,” said Jerry Kozak, president and CEO of NMPF. “Because the stakes are so high, we want to be certain that we have fully explored all the consequences of any actions that we recommend, such as how the position of the U.S. dairy business may evolve over time compared to our competitors in other countries.”
The Task Force heard detailed analyses of the so-called price stabilization plan, being promoted by Holstein Association USA, Chuck Nicholson of Cornell University and Richard Sexton of the University of California-Davis. Each economist offered his perspective on how the supply management program would be implemented, how it would affect farm-level prices and alter the flow of both imports to and exports from the U.S. market.
“We recognize that the proposals the Task Force is reviewing won’t relieve the current pain and suffering on dairy farms across the country. However, the severity of the present situation raises the stakes for our effort, and strengthens the resolve of our group to make certain we are as thorough as possible in suggesting changes in future dairy policy,” Kozak said.
While the NMPF Strategic Planning Task Force is focused on future changes in milk pricing, Kozak said that NMPF is continuing to take short-term steps to help improve the pricing situation. This includes having Cooperatives Working Together conduct its second-largest herd retirement round in August and September, and continuing to work with the U.S. Department of Agriculture to implement corrective improvements, such as the recent increase in the dairy product price support program.
NMPF Strategic Planning Task Force probes milk-pricing proposals
August 11, 2009