Funds from the Cooperatives Working Together (CWT) program will be used to assist CWT members with the Dairy Export Incentive Program (DEIP), the National Milk Producers Federation (NMPF) said today.
The move was approved by NMPF's board of directors, which directed CWT management to begin assisting members with the export program. NMPF's sales-boosting measure comes in response to the economic crisis affecting U.S. dairy producers.
DEIP has the potential to export the equivalent of more than 1.5 billion pounds of milk, NMPF said.
The management of CWT, which is an NMPF entity, had originally opted not to pursue export assistance in 2009. It believed the most effective approach to improving farm prices was to use herd retirements. CWT is in the midst of removing more than 100,000 cows, equivalent to two billion pounds of milk, in the largest-ever herd retirement in its six-year history.
DEIP helps exporters of U.S. dairy products meet prevailing world prices for targeted dairy products and destinations. Under the program, USDA pays cash to exporters as bonuses, allowing them to sell certain U.S. dairy products at prices lower than the exporter's costs of acquiring them.
While CWT's Export Assistance program isn't meant to replace the use of the DEIP, "we've always seen it as a complement to the role of DEIP, and so we are willing to utilize specially designated CWT funds to help expedite the use of the government's resources to help remove one percent of the nation's dairy production through DEIP,” said NMPF President and CEO Jerry Kozak.
Kozak said the export-boosting measure will further aid efforts to correct the supply-demand imbalance at the heart of the financial hardship being faced by thousands of American dairy farm families.
The action was first recommended by a recently formed Strategic Planning Task Force, a new NMPF effort to respond to the economic woes of U.S. dairy producers.
The new group met last week to focus on short-term solutions to the economic woes of U.S. dairy producers and to establish an aggressive schedule for addressing the industry's longer-term solutions.
It meets next week in Chicago with major dairy industry organizations to address longer-term factors affecting price and volatility.
Catherine Merlo is Western editor for Dairy Today. You can reach her at firstname.lastname@example.org.