By Catherine Merlo
Instead of trying to market all the milk the U.S. dairy industry produces, it would be better to produce the milk it can market.
That’s the basic philosophy behind the Dairy Price Stabilization Program (DPSP) proposed by Holstein Association USA, according to Gordon Cook, board member of the organization and Massachusetts dairy producer.
Cook has been one of the key architects of the DPSP, a supply management program that seems to be gaining widespread support from U.S. dairy producers – if not from a large number of U.S. dairy organizations.
I met Wednesday afternoon with Cook and John Meyer, president of the Holstein Association, at World Dairy Expo in Madison, Wis., to hear directly about their plan.
The DPSP proposes a national, mandatory plan that sets a base for producers’ milk production and assesses them a fee if they exceed it. The Holstein Association believes the plan, modeled by Cornell University, is a long-term solution to the price volatility that has plagued the dairy industry. The DPSP proposal would remove the incentives that encourage too much milk production. It would prevent severely depressed producer milk prices and reward producers who stay in line with market needs.
“This is the only bona fide plan out there” that attempts to address the supply-demand imbalance and price volatility, Meyer says. “Everyone else is vague in their ideas, with no details.
“The majority of people who produce milk for a living really relish this plan,” he adds.
The association is in the process of getting a DPSP bill written in Congress, and hopes that will be done this year.
Opponents have criticized the DPSP proposal, saying the higher prices it seeks would attract more dairy imports.
“We’re attracting dairy imports currently,” Cook says. “Some are coming in not even as dairy or even food products, to be used to enhance the yield of cheese.” Moreover, adds Meyer, some of those critics who use the “red herring” issue of imports “are people who are actually doing the importing.”
And those who oppose the DPSP because of its government connection – it would be administered by USDA’s Farm Services Agency – might want to consider that many in the industry are already involved with MILC and other programs. “We haven’t found any uncashed MILC payments,” Cook says.
Even so, Cook acknowledges that government involvement, imports and other trade issues have to be dealt with. The DPSP proposal is one step toward fixing the industry’s problems.
“Our plan did not address all the current ills of industry,” Meyer says. “We were told by officials in Washington that anything that required opening the farm bill would not get a second look. Our plan works in concert with all current dairy programs and the farm bill doesn’t need to be opened, so this proposal is a positive that could move forward quickly.”
What’s needed now, Cook says, is for “more people and producers to step up and . . . be more vocal about” the proposal, to stand up and tell their people who represent them on co-op boards” to support it.
“Supply management and the DPSP program are long overdue,” Meyer says. “We’ve seen a groundswell of support for the program. We encourage people to contact their officials in Washington to support supply management and look for our bill.”
“Producers, whether they’re members of the Holstein Association or not, should look at the Holstein Association Web page and sign on as supporters,” Cook says. “It would help a lot as we try to get support for this bill.”
One change made in the DPSP program since it took off in April involves the addition of a “new milk” term. Watch the video where Cook and Meyer explain the “new milk” addition to the Dairy Price Stabilization Program.
The DPSP proposal was born early this year in the Holstein Association, which counts 30,000 members across the U.S. As 2009 prices plunged, “those with a history in milk marketing were sitting on their hands,” Meyer says. “Our legislative committee said we needed to do something because those who should, aren’t.”
Catherine Merlo is Western editor for Dairy Today. You can reach her at email@example.com.