No Easy Cure: Producer group offers a growth management plan, but many are wary

September 18, 2009 10:32 AM


"There's a lot of pain in this industry, " says California's Joey Airoso, who supports the DPSP proposal.

Joey Airoso admits that his first reaction to the Dairy Price Stabilization Program (DPSP) was negative. Having recently expanded his dairy, Airoso wasn't inclined to accept a national, mandatory plan that sets a base for milk production and assesses producers a fee if they exceed it.

But as he studied the growth management plan proposed earlier this year by Holstein Association USA, he reconsidered. "It's time to do something different…that will enable producers to work together and control the milk supply,” says Airoso, who milks 1,600 cows near Pixley, Calif. His family has been a member of the Holstein association for four decades.

The proposal has found support from California's Milk Producers Council, the Oregon Milk Producers Association, the Washington State Dairy Federation and eight other U.S. dairy organizations. Prominent California producers like Hank van Exel, Doug and Steve Maddox and Syp Vander Dussen have also endorsed it.

They believe the plan, modeled by Cornell University, is a long-term solution to the price volatility that has plagued the dairy industry. It would, they say, remove the incentives that encourage too much milk production, prevent severely depressed producer milk prices and reward producers who stay in line with market needs.

The proposal, however, has also drawn industry fire. The Minnesota Milk Producers Association, Idaho Dairymen's Association and New Mexico's Select Milk Producers, Inc., are among those that oppose it. Western United Dairymen "supports the concept of supply management but has big concerns” about the DPSP proposal, says CEO Michael Marsh.

Opponents fear an increased U.S. milk price resulting from DPSP efforts would attract cheaper dairy imports. They also foresee program cheating. Some oppose the plan, which would be administered by USDA's Farm Service Agency, because they dislike government intervention.

The National Milk Producers Federation (NMPF), which represents the nation's dairy co-ops, is still studying the proposal. "Because the stakes are so high, we want to be certain we have fully explored all the consequences of any actions that we recommend,” says President and CEO Jerry Kozak.

As an NMPF member, United Dairymen of Arizona hasn't taken an official position, but it is unlikely to favor a program that requires government involvement, says CEO Keith Murfield.

Among others that haven't taken a position is Wisconsin's Dairy Business Association (DBA). But in the Upper Midwest, where cheesemakers continue to look for more milk, supply management isn't likely to find support. "Only market-based solutions will solve the problem of low milk prices over the long term,” says DBA Executive Director Laurie Fischer.

In the meantime, California's Airoso continues his efforts to educate producers about the plan. "There's a lot of pain in this industry, and we're not getting a fair shake,” he says. "Something needs to be done.”  DT

Bonus content:

Get DPSP details

View a DPSP proposal analysis by Cornell University's Chuck Nicholson and Mark Stephenson.

Learn why Minnesota Milk Producers Association believes supply management is bad for the state's dairy families.

Read the Wisconsin Dairy Business Association's opinion on supply management.

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