Dairy Talk: Shore up the Foundation

September 2, 2010 09:02 AM

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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.

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Spell Check

9/8/2010 03:15 AM

  “Foundation for the Future” is nothing but slapping a new fancy name on preserving the status quo. Things have gotten bad enough that finally most producers realize that we need to take control of our industry. The Foundation for the Future plan is being pushed as an alternative to the Holstein stabilization plan by large western producers and processors who fear the adoption of a plan that may bring profitability to smaller dairy farms, and can see the growing unity among the majority of producers. If this plan will truly be best for producers, then why is there a need to exchange MILC payments for a government funded insurance program? Under periods of stable, fair milk prices, there are no MILC payments--costing the government nothing. Under low prices, the insurance plan waters down already paltry support from the MILC program. One only needs to look at the big money interests promoting this plan. Foundation for the Future does nothing but put a nail in the coffin of family dairy producers.


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