The Cooperatives Working Together (CWT) program has already incentivized so many sales in 2013 that it could run out of money—and leave potential export sales on the table—before the end of the year.
CWT has budgeted $30 million to incentivize dairy exports in 2013. Year to date, it has already spent $7 million.
Consequently, CWT officials are asking members to double their contributions, from 2¢/cwt to 4¢/cwt starting in July. "CWT is the only true safety net we have in place," says Jerry Kozak, President and CEO of the National Milk Producers Federation.
Dairy cooperative officials will take the proposal back to their Board of Directors this spring so that a final decision can be made in June, he says.
Roughly 70% of the nation’s milk supply is enrolled in the program. The money is used as an incentive, or export subsidy, if you will, for overseas sales. Last year, CWT incentivized 18% of U.S. cheese exports (83% of American-type cheese was CWT subsidized) and 62% of butter exports.
The tonnages represented about 2.74 billion lb. of milk equivalent. Those sales generated about 45¢/cwt to U.S. dairy farmers milk checks, according to analysis done by the University of Missouri.
If passed, the 4¢/cwt assessment would be in place for 2014 and 2015. Click here for more information on CWT.