Op Ed: It’s All Global Now

August 16, 2011 12:10 PM

U.S. dairy policy must reflect global economic reality if it is to be effective in fostering an economic climate in which our dairy farm families can grow and prosper, says this California dairy producer.

Bledsoe Dairy calves drugs 9 09 046   CopyBy Jamie Bledsoe, President, Western United Dairymen

There used to be a time when milk supply was local. Milk produced on the farm fed that farm’s families. Later, the milk might have been sold to a local bottler to distribute to nearby city dwellers. Or it may have made its way to the local cheese or butter plant for distribution to urban areas within a wider region. In time, with the evolution in transportation and refrigeration, fresh milk and dairy products could easily be marketed throughout the United States. Today, milk produced on a small, multi-generation dairy farm in California can find its way to customers around the globe.

Global demand for dairy products continues to grow at a rapid rate. Emerging market economies generating new affluence and a middle class clientele reach across physical and political boundaries to feed a growing population. As consumers gain financial security, they have more money to spend on food. Not just more food, but better nutrition. Dairy, as we know, packs a nutritional wallop that is unmatched. Hence, the global demand for high quality dairy foods has grown along with increasingly prosperous economies in heavily populated urban areas of Asia and South America.

According to the United Nations Food and Agriculture Organization (FAO), the United States produces about 12% of the world’s milk supply. Fonterra pegs U.S. milk production at 13%. While U.S. dairy products are capable of traveling the globe looking for a home, similar products from other nations are on that same journey. A production decision made in Australia, Argentina, or the EU has an impact on dairy families around the world.

There is no way to avoid the fact that today milk supply is a global commodity. Consumers standing at the dairy case in Tokyo and San Francisco have domestic and imported products to choose from. Families in Beijing can choose from butter made in California or New Zealand.

It cost the U.S. government and taxpayers a lot of money, through the Dairy Product Price Support Program, to put a “floor” on U.S. dairy prices, and indirectly to floor the 88% of the milk produced outside the U.S. as well. U.S. dairy policy will need to reflect global economic reality if it is to be effective in fostering an economic climate in which our dairy farm families can grow and prosper.

Our nation seems to be in a contentious time, politically. While it may not be comfortable to watch competing ideas do battle, that is the way democracies work. In the end, we believe that all participants will have the opportunity to fairly test their ideas in open debate and to modify them as the discussions develop.

Our job, the job of the Western United Dairymen board of directors, is to keep you informed about the issues and to let the folks in Washington know what they can do to help our dairy families make it into the next century.

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