Should We Just Move to Canada?

March 3, 2011 04:24 AM
 

JeremyVisser 049Jeremy Visser

Sumas, Wash.

Visser milks 3,200 Jerseys and Holsteins near the Canadian border.   


Editor’s note: Visser serves on the board of Darigold, the Seattle-based marketing and processing subsidiary of the Northwest Dairy Association.

Let’s move to Canada. I just love the fear-mongering that’s being put out there by some (mostly by the International Dairy Foods Association) that supply management will ruin our industry.

I live next to Canada and know many Canadian dairy producers. They have told me the facts: It’s difficult to get into the dairy business in Canada, and it requires a lot of capital, just like here.
But the fact that they have banks lining up to finance them and many people wishing to buy into their dairy industry demonstrates a clear difference from our industry here in the U.S.

It may be “cheaper” for us to start, but we definitely have a much lower profit potential on our farms because we receive a much smaller percentage of the retail dollar. Another difference: The Canadian government blocks nearly all dairy imports. That will not happen here, nor should it. We go one step further—heck, we have co-ops trying to fight country-of-origin labeling.

I haven’t seen anyone here in the good ol’ USA mention real supply management in any of these plans, so let’s talk about what is in the Foundation for the Future plan, or “the Milk Marketing Reform Act of 2011.” Let’s leave the fear-mongering to the Hollywood types.

I am truly amazed that we are such poor exporters. For years, we as producers were told that we needed to lower our cost to compete with Fonterra and others in low-cost areas of the world because that was the world price.

For the last four years, our product prices have trailed the foreign markets, sometimes by vast sums. So be leery of someone who tells you that exports are the future and yet has no idea how to get a fair price for your milk in the export arena. Sure, the exporter may make money; just don’t make it by paying me less.

We must also stand up and fight against subsidies and overregulation. The prime target for most of us who feed cows is the mandated use of corn for fuel (Renewable Fuels Standard) and its supporting tariffs and blenders’ credits. The current subsidies for ethanol are set to expire at the end of the year. Let’s speak with one voice to make sure that happens.

At the same time, we must eliminate the dairy product price support and MILC. I hope that we are willing to give up our pet subsidies, just as we ask those upstream from us to do the same.

These actions, combined with the end of end-product pricing, will lead to a more market-driven supply chain where consumers’ needs are filled by products they demand and processors stop handling excess milk and converting it to products that aren’t in demand to overhang the market. 

Visser's January Prices  
Milk (net mailbox) (3.5% bf, 3% prt): $14.70/cwt.
Cull cows: $65/lb.
Springing heifers: $1,400/head
Alfalfa hay (milk cow): $235/ton
Corn (rolled): $307/ton
Canola:  $300/ton
Soybean meal:  $420/ton

 

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