The Minnesota Farmers Union is joining farm organizations across the country in presenting proposals that could slow the loss of family dairy farms.
Several states are hosting sessions called “Dairy Together” to offer ideas to dairy farmers and industry stakeholders about potential pathways toward market stabilization. The Minnesota meeting will be 10 a.m. to noon April 16 at the Greenwald Pub, 310 First Ave. N, Greenwald.
Dairy Together is a collaboration between Farmers Union and the National Farmers Organization. The groups will present research on plans that consider federal milk order system reform via a structured dairy pricing program, as well as avenues of oversupply management through an updated version of the Dairy Market Stabilization Program, which was considered for the 2014 Farm Bill.
Recognizing the urgency of the situation dairy farmers are facing, the groups also will unveil plans for short-term emergency relief.
“Our current milk marketplace is not getting family dairy farmers a fair income,” says Gary Wertish, MFU president. “We have a major surplus of milk, and too many dairies have had to close. We need long-term solutions that will make dairying a sustainable income for any size farm, and we look forward to sharing the research done about it.”
Farm income analysis
Last winter, Wisconsin Farmers Union enlisted dairy economists Mark Stephenson from the University of Wisconsin and Chuck Nicholson from Cornell University to analyze selected dairy programs to reduce volatility in milk prices and farm income.
The meetings will share researchers’ data on several potential programs’ impacts on net farm operating income, farm numbers, domestic demand and cost to the government versus the Margin Protection Program.
“The bottom line on what we found was generally pretty positive in terms of thinking of what these programs could do,” Nicholson says. “We saw reduced variation in prices and also some price enhancement, increased net farm operating incomes, reduction in the rate of farm exits across farms of all sizes and a reduction in government expenditures on dairy programs.”
Structured dairy pricing
USDA data shows that production costs are higher for smaller dairies than for large ones. The National Farmers Organization proposes modifying the Federal Milk Marketing Order by recognizing the differences in costs to produce milk on differing farm sizes. The policy would change the way money pooled on the FMMO would be distributed, allocating funds to dairy farmers at two tiers based on milk marketing volume.
Dick Bylsma, National Farmers Organization dairy sales director, says marketing orders were originally created in the 1930s to level the dairy farmer playing field and improve prices paid to producers.
“But now, the order system no longer achieves its original goals,” he says. “If milk marketing orders can recognize differing product values, it can also recognize different production costs on various farm sizes.”
Check out a video of Nicholson and Stephenson discussing their research.