While many of us in the dairy industry think of a herd buyout program when talking about Cooperatives Working Together (CWT), the program is designed to promote the sale of U.S. dairy products to overseas customers and see a better alignment of supply and demand for milk and milk products at home. In fact, the voluntary market-focused program that is managed by the National Milk Producers Federation (NMPF), has not had the ‘herd buyout’ portion since 2009.
That was the year that the largest contraction to the U.S. dairy herd unfolded when we lost just shy of 250,000 head in 12 months. CWT played a huge role, spending roughly 225 million dollars subsidizing the slaughter of approximately 200,000 cows.
However, Jim Mulhern, president and CEO of NMPF, said that he believes the CWT program will continue to focus on export assistance and not participate in future herd buyout programs.
“I think this program is going to stay as an Export Assistance Program. What we saw with past activities on the herd buyout is you buy the herds out, milk production rebounds and we are right back to where it was and it finds its own level,” he says. “That’s not an effective use of resources to do that.”
Mulhern shares that around a billion pounds of milk is exported annually through the CWT program. However, a depressed world market has caused strong headwinds in the international marketplace and has challenged the dairy export arena.
“We’re using CWT, which is a self-help program funded by dairy farmers and cooperatives to help close that gap. We’re going to move close to a billion pounds of milk this year,” Mulhern shares. “And I think we’re going to be able to do more in the future.”
The CWT program was established in 2003. This September, CWT member cooperatives secured 30 contracts, adding 2.4 million pounds of American-type cheeses, 99,000 pounds of butter, 719,000 pounds of cream cheese and 7.1 million pounds of whole milk powder to CWT-assisted sales in 2023. In milk equivalent, this is equal to 82.2 million pounds of milk on a milkfat basis. These products will go to customers in Asia, Central America, the Caribbean, South America and the Middle East-North Africa, and will be shipped from September 2023 through March 2024.
