Instability in dairy industry fuels Vilsack's call for reform

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Tough times in the dairy industry are not lost on U.S. Secretary of Agriculture Tom Vilsack.

Speaking to a World Dairy Expo gathering on Tuesday, Vilsack acknowledged there have been “significant price spikes and very deep depressed prices” in recent years.” And the time interval between those spikes is shortening so that producers don’t have the time to rebound from difficult years, he added.

Against that backdrop, he expressed frustration at the inability of Congress to get a new Farm Bill passed.

Versions of the Farm Bill that got through the U.S. Senate and House Agriculture Committee would have provided margin protection to help insure against unfavorable swings in feed prices relative to milk prices. But a final vote on those proposals was held up by the House leadership.

While controversial in some aspects, those proposals (also known as the Dairy Security Act) were “a recognition that dairy can’t continue to have the instability and volatility that we’ve seen over the course of the last 10 to 15 years,” Vilsack said.

Now, with the Farm Bill facing an uncertain future, there is speculation that milk prices could reach $38 per hundredweight ― actually, the range could be $38 and $50, Vilsack says ― if nothing gets done by Jan. 1. At that point, the dairy price support level will revert back to permanent law passed In the 1940s, which includes parity pricing.

While that may sound like good news for dairy farmers, such a spike in milk prices would have a ripple effect throughout the entire supply chain, Vilsack pointed out. That, in turn, could impact consumer choice and have people looking for alternatives to milk if milk becomes too high-priced.

While Congress gets most of the blame for not passing a Farm Bill, Vilsack said it’s also difficult to get things done when dairymen themselves are divided on the issues. 

“As I travel around the country, what I've noticed (is) dairymen and dairywomen have a hard time agreeing,” he said. “The problem is we have not had consensus and that’s made it difficult for us to get a program that would allow some stability and some protection.”  


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Batavia, NY  |  October, 03, 2012 at 10:51 AM

United States Secretary of Agriculture Tom Vilsack has also been sending his people to Mexico to help the Mexican government recruit new food stamp recipients. As a taxpayer I am against this Soviet 5 year plan that they are calling a farm bill. How many more lazy people who refuse to feed themselves do I need to feed? As a dairy farmer I am against this farm bill with dairy supply management. I can not work any harder to pay the 6 or maybe even 7 figure salaries of the new board members that will be needed to staff the new boards to implement this program. Nor can I support a plan designed to help larger farms prosper while crushing the few remaining small dairy farms. They killed the MILC program since it helped smaller dairies more than larger dairies and now they want to shove this down our throats. I hope the Tea Party Republicans hold firm!

Joe Dairyman    
USA  |  October, 03, 2012 at 04:36 PM

So Ken you are accusing large dairyman of hireing food stamp recipients? And since you are a small dairyman that pays taxes your entitled to MILC? And a big dairyman that pays more taxes should be treated different than a small dairy? And I assume you want to keep the Ethanol mandate right???

Melba, ID  |  October, 03, 2012 at 03:01 PM

Ken, I agree. We don't need the "Dairy Security Act" nor do we need more people earning huge salaries to do a poor job with something that we all know the market will do anyway. I will however disagree with you on the "large farm" conspiracy to get rid of milc. I see no reason why small farms should get preferential treatment aka higher gross percentage of revenues when it comes to subsidies. I personally don't think there should be any subsidies and I especially don't want supply controls. If we have a free market, let it be a free market. It will result in more efficient operations and the better managers will be rewarded with the benefits of doing a good job. Versus everyone stays in regardless of whether they are good at it or not. There are too many dairymen out there that feel entitled to milk cows. Well, that's just crazy. I think small farms should exist. But they also should be efficient and well managed so as to stay in business.

highland il  |  October, 03, 2012 at 03:07 PM

Lets hope prices revert back to parity. If $38 and $50 milk become reality it will stop some pain over the last 10 to 15 years. After the election some other short measure will be passed to keep dairy costs to the consumer in line. If Secretary Vilsack asked dairy producers if these prices were to become reality I believe the majority could live with those prices.

Batavia, NY  |  October, 03, 2012 at 06:53 PM

Hey "Joe Dairyman", did you stop learning after you finished attending a public school? I think you need to read my post again and determine where I said anything about "large dairyman of hireing food stamp recipients". What is your definition of a small dairyman? And how did you determine that I was one? Am I considered a "small dairyman" because I do not want the dairy security act to crush small farmers? Or maybe because I believe in capitalism and do not want NMPF cabal of overpaid donkeys telling me how much milk I can produce. And Yes!! I love ethanol. The mandate can go away, but the benders will still use it as an oxygenate and also to increase octane levels. Without ethanol we would have had three dollar corn last year and $11.00 milk, or lower. These farms with thousands of cows that buy all their feed would be producing enough milk to flood the country.

PA  |  October, 03, 2012 at 07:42 PM

Free markets require people playing by the rules, so as long as the big farms stop hiring illegals I agree with Peter - the small family farm's one true competitive advantage (they can get the work done) will be effective in increasing their efficiency relative to the large farms.

Colorado  |  October, 03, 2012 at 08:06 PM

Yes, we've had volatility. Yes, not even organic dairymen agree, like adding a pasture requirement after the issue was "hormones",antibiotics, and "herbicides-pesticides", then feeding hay in confinement when everything freezes. The issue: take away 40% of any feed ingredient and burn it up, then act like tough times are not a direct result of the EPA ethanol mandate, and burning up 40% of our corn crop, even in a drought year.Tells us where Vilsacks true interests are.

ed g    
new york  |  October, 04, 2012 at 06:37 PM

I agree with peter and cd, milc should be gone after all vilsaks has the ability to set the price high enough that milc payments would not be needed let the consumer pay at the grocer rather than in taxes. If farms want to hire full time labor don't you think they should pay a high enough wage with benefits that the tax payer is not paying for it. No body told the farmer to buy more cows than they can handle, if you want that many cows than be prepaired to pay the wages and benefits for those workers don't expect me too, wither you have 1 cow to many or 10,000. Every time they come up with a new plan to help us it gets worse, we should go back to what our grandparents and great grandparents fought for.

Dairy Matron    
PA  |  October, 05, 2012 at 10:09 AM

The "tough times" have been caused by the likes of the mouthpiece Vilsack and his DC cronies backing the ideology and policies put forth by NMPF types guilty of decades of keeping the raw milk price so low for ALL US farmers that 90% of our fellow dairymen are gone---big or small, region to region, and that's had a terrible effect on our dairy farming communities everywhere. Raw milk has value, and the work and economic activity provided by dairy farmers (no matter the farm size!) has intrinsic value that has been ignored and eliminated by the feds in the federal minimum pricing formula("Order Reform") and by the Capper-Volstead co-ops themselves who have the legal authority-- and moral obligation!--to set a realistic raw milk price that the BUYERS (aka PROCESSORS!) should be paying to get the milk for their PLANTS (prices we get paid are neither realistic nor ethical!) but they REFUSE to do so, masquerading as farmer-owned co-ops, doing NOTHING to get farmers an honest milk price! The entire "Farm" Bill is pro-Big Ag/Big Food Industry (including the Dairy "Industry" which is not pro-US dairy FARMER!) with shameful taxpayer exploiting subsidies. Even with ethanol's impact on our feed bills, even with the insulting low federal minimum milk prices, dairy farmers would be able to cope financially if the co-ops would sign the MAIC's and set the milk price farmers need to stay in business. The dairy "industry" globalists in DC and in the dairy co-ops love all this infighting and class warfare that erupts in discussions like these as more and more of our people are forced off their farms by unjust milk pricing policies. God is not pleased with this dog-eat-dog divisiveness. He will withhold His blessings from our efforts.

wi  |  October, 05, 2012 at 03:56 PM

OK, give me a reply on this point of view. We have a parishable product. Can't store it and wait for the price to go up. We have a government that want cheep food for the masses. So they implement programs. Welfare for the farmer. (MILC) Low interest loans to farmers that can't make their payments borrowing money from other institutions, ie banks (FSA) school lunch programs that mandate skim milk and single servings, on and on and on. They want overproduction. Let there be a true supply and demand situation and on the world market. Make the product the consumer in this country wants and the consumer in other countries want and PUT IT IN FRONT OF THEM. They will buy it. Why is it when hunters from WI go out west they load the trucks with cheese? Why is it even in Wisconsin no one can get good Cheddar or Swiss or whatever? We have a distribution problem. Instead we have make allowances for factories to keep chugging along with no innovation or motivation to do something different. Do I have any ideas to change this. ? It's pretty hard when we don't have enough votes to matter. If we go back to parity yes we could see higher prices until we overproduce and bring it back down. And the government has bought a buch of product that nobody wants and it ends up back in the cheese vats and lowers price.

wi  |  October, 05, 2012 at 04:01 PM

Exactly! Anytime prices cannot return a fair return to labor and resources the co-op leaders should be fired and get someone that cares. The crony board members only care about their per diem. The same thing with check off dollars. Give us back our fifteen cents when prices peet support.

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