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CWT 2.0

November 17, 2010
By: Jim Dickrell, Dairy Today Editor
 
 

 

Bonus Content


Cooperatives Working Together

AgDairy Market Update by Robin Schmahl

The revised version of the Cooperatives Working Together (CWT) program will focus solely on enhancing U.S. dairy exports.

The decision was made at the annual meeting of the National Milk Producers Federation (NMPF) in late October. Throughout its seven-year history, CWT has funded 10 herd buyouts, culling 510,000 cows. But critics of the program point out that culling cows from the herd only temporarily slows milk production.

In addition, critics say, the larger of the herd retirements had the potential to actually short the U.S. domestic market, which could be back-filled by imports. “The new focus on exports allows us to fully supply our domestic markets while building export sales,” says Jim Tillison, chief operating officer of CWT.

 

The new program will ask participants for only a 2¢/cwt. commitment for 2011 and 2012. CWT members will also require that 75% of the nation’s milk supply be involved in order for the program to continue.

CWT currently has a $30 million reserve, which will be split evenly between 2011 and 2012. If the 75% participation threshold is reached, CWT will have about $40 million to spend on export bonuses in each of the next two years.

It remains to be seen whether the 75% level will be reached, however. California Dairies, Inc., the nation’s second largest dairy coop, producing more than 9% of the nation’s milk, did not support the new version of CWT at the NMPF annual meeting.

Economic analysis by the University of Missouri shows that $15.53 in revenue is gained for every $1 spent on export bonuses. The return for herd retirements was $19.12 for every $1 spent.

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FEATURED IN: Dairy Today - June/July 2008

 
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COMMENTS (4 Comments)

Calvin D. Paulson - Harrisonburg, VA
We need to ask the questions that may answer concerns, this is our program, and I believe it has merit. The DEIP export program, Govt run, never made any timely sales while powder piled up. Politicians often forget the farmer back home, end up buying imports we don't need. They use exports as bargaining gifts. When we can master this world market as our floor price, we'll need all the cows we can get. Get involved, see both sides of the coin. Then united we can complain/shake-up/shape-up! If 2cents is too much, i'd assume DEPAC is below you also?
11:11 PM Mar 10th
 
cow land - SHERBURNE, NY
I was thining the same thing. just look what diesal has done. I hope they don't reach 75%. Seems like having 30 mil in reserve after 09 and 10 makes me think they just want to keep enough money to ensure their lavish lifestyle.
6:07 AM Feb 8th
 
Smallest Dairy Farmer
Correction............Doesn't SEEM to
1:17 PM Jan 10th
 
Smallest Dairy Farmer
Doesn't see to be reaching us. Record exports & 70's milk price. Note corn price is triple what it was in the 70's. Consider supply, fertilizer, gas price, cost of family living in the 70's as well. These things are triple as well or nearly so. So this price we have now is not near the price of 70's milk prices.
1:16 PM Jan 10th
 



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