A mid economic stimulus, the auto industry bailout, health care reform and cash for clunkers, the Obama administration appears to be adding federal order reform to its list of priorities.

A mid economic stimulus, the auto industry bailout, health care reform and cash for clunkers, the Obama administration appears to be adding federal order reform to its list of priorities.

Agriculture Secretary Tom Vilsack announced late last month the USDA will assemble a Dairy Advisory Committee to “develop changes to the dairy pricing system to avoid the boom-and-bust cycle behind the crisis facing many dairy farmers this year.” IDFA responded swiftly, congratulating Vilsack for “listening to the concerns of producers and processors,” and announced it will establish a nomination process for selecting members of the processor community to serve on the new panel. The committee will include producers, processors, retailers and consumers, among others. You can read more about it at dairyfoods.com or idfa.org.

So, is this finally the light at the end of the tunnel? After decades of failed attempts and inaction, will Vilsack and Obama be the white knights riding to the industry’s rescue?

Frankly, Obama and his team don’t seem to be the kind of folks willing to allow markets to operate as they should. True reform should be more than just jacking up price support payments. This administration is setting new records for trying to spend the nation out of an economic hole, a plan of attack that suggests federal order “reform” under Obama just means higher government-enforced minimum milk prices.

Of course, mandated minimum prices don’t provide any incentive for doing better. Vermont Sen. Bernie Sanders recently issued a series of press releases criticizing Dean Foods for raking in record profits while dairy farmers in his state face bankruptcy. Sanders suggested that processors shouldn’t be restricted by federal minimum prices and voluntarily pay farmers more. Uh-huh.

The goal of any business is to deliver the best possible product and maximize profits while holding the line on costs. Paying more than necessary or mandated by law for raw materials is irresponsible to stockholders, who likely include many a 401(k) that has taken a beating over the past year. It seems to me farmers would be better off if the government gets out of the way so producers can negotiate directly with processors for milk prices based on their actual cost of production plus a fair profit.

In any case, IDFA appears hopeful that we’ve finally reached a turning point in the long journey toward reforming federal orders. We’ll see whether that means coming up with a better way of doing business that’s truly beneficial to all and reflective of a modern dairy industry, or just throwing more money into a bottomless pit.

In other news …

Michigan State University has opened an experimental dairy with technology that allows cows to decide for themselves when they want to be milked.

“If a cow decides she wants to milk at 2 o’clock in the morning, she can,” MSU’s Mat Haan told the Associated Press. The technology, designed to reduce labor costs, is aimed at small and medium-size family dairy farms to help them stay competitive against dairies with 1,000 or more head. Laser monitors recognize when cows approach the device and position suction cups for milking.

Lord knows dairy farmers need all the help they can get right now, and this is at least something, while we all wait for a federal order miracle.

While relatively new in the United States, robotic milking technology apparently has been in use for quite some time abroad, according to the AP story. In fact, the machines at MSU were built by a company in the Netherlands, which has sold more than 7,000 robotic milkers in 30 countries since releasing its first model in 1995. The machine also measures the cow’s weight, eating behavior (it dispenses food as well) and milk yield and quality.

As automation continues to make greater inroads at the processor level to increase efficiency and reduce costs, it’s good to know there are options available like this for producers. Alas, capital expenditures aren’t in the cards for many farmers at the moment. 

James Dudlicek, chief editor of Dairy Foods, can be reached at 847/405-4009 or dudlicekj@dairyfoods.com.