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NMPFs Mulhern: CWT Sales Buoying U.S. Milk Prices

21:34PM Feb 26, 2015

The Cooperatives Working Together (CWT) program, which subsidizes exports sales by U.S. dairy cooperatives, is part of the reason U.S. commodity prices have remained above world prices, says Jim Mulhern, President and CEO of the National Milk Producers Federation (NMPF).

The CWT program helps maintain dairy exports, helps the United States be a more reliable supplier when world prices spike and strengthens global demand, he says. The program is up for renewal this summer.

Mulhern, speaking at Land O’Lakes annual meeting this week, says the CWT program has helped move more than 2.5 billion lb. of milk on a milk fat basis into global markets in 2014. With roughly 12.5 billion lb. of milk equivalent exported (milk fat basis) last year, CWT would have accounted for roughly 20% of U.S. exports on an aggregate basis.

Last year, 102 million lb. of cheese, 45 million lb. of butter and 57 million lb. of whole milk powder were exported with CWT assistance. That accounts for 13% of total cheese exports, 44% of butter exports and 25% of whole milk powder exports. CWT sales were made in 45 countries on every continent but Antarctica.

Thirty seven cooperatives, representing almost 70% of the nation’s milk supply, participate in the program and are eligible to submit bids for export assistance.

The program is funded by a 4¢/cwt assessment from dairy farmer members of the participating cooperatives. Some 130 independent dairy farmers also contribute to the program.

NMPF began the CWT program in 2003. At that time, the assessment was 10¢/cwt and the program’s biggest component was a whole-herd buying program. That part of the program proved somewhat self-defeating. As herds were culled, milk prices rebounded and existing dairy farmers expanded milk production. The herd buyout component was discontinued in 2010, and the program focused on export assistance.

NMPF’s goal is to have at least 70% of the nation’s milk supply contributing to the CWT program to make it both viable and broadly funded. The CWT program will be brought up for discussion at the NMPF March Board meeting with a vote held in July. 

For more on the CWT program, click here.