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Dairy Talk: Shore up the Foundation

14:02PM Sep 02, 2010

Bonus Content

More on Foundation for the Future
Dairy Proposals Would Reduce Volatility

Jerry Kozak, president and CEO of the National Milk Producers Federation (NMPF), is a road warrior. He has logged some 35,000 air miles to give 20 presentations on NMPF’s Foundation for the Future plan for revamping U.S. dairy policy. The plan would:
 

  • eliminate dairy price supports and Milk Income Loss Contract (MILC) payments.

 

  • provide milk margin insurance for a disaster year like 2009, fully paid by tax dollars with no production caps. Partially subsidized insurance would be available for additional protection.

 

  • establish competitive pricing for cheese milk in Federal Orders and eliminate make allowances.

 

  • create a standby supply management plan.
     

Last month, I heard Kozak present the plan to a Wisconsin crowd. It’s clear that he and the co-ops have some hard selling to do. Here are the sticking points.

1. Need: Several times, producers wondered aloud why the Holstein Association plan isn’t a better approach, or why the industry just shouldn’t ban BST and sexed semen to solve the oversupply problem.

2. Big versus small: Others objected to the plan because the margin-protection insurance program doesn’t have production caps like MILC. They wondered if taxpayers would support a plan that protects 3,000-cow dairies just as much as it does 50-cow, single-family farms.

3. Details: NMPF is still struggling with how it will price Class IV milk. The fear is that if California undercuts the Federal Order price by as little as ½¢ per pound, powder plants across the system could be shuttered.

For the plan to gain traction, NMPF must patch these cracks and answer these questions. Kozak can’t do it alone. In some areas, in fact, he’s become a lightning rod for the opposition.

The 96% of NMPF member co-ops that support the plan must now make the compelling case that Foundation for the Future is the best way forward. I’m convinced it is, but many producers aren’t.