BRATTLEBORO – If there was any major takeaway from a meeting of Wisconsin, New England and national dairy organizations in Brattleboro on Wednesday, it’s that the movement for a supply management program would need to be – and largely already is – a national one.
Representatives from the Wisconsin Farmers Union and National Farmers Organization both presented their own blueprints for programs managing a current oversupply of milk products in the U.S. dairy industry to New England farmers and cooperatives, including a handful of farmers from Franklin County.
“When we say ‘Dairy Together,’ we mean ‘together,’” said Kara O’Connor, WFU’s Government Relations Director, invoking the formal name for Wednesday’s meeting. “Because we operate in a national market and an international market, solutions need to be operate at a national level.”
While the details in their proposal differed slightly from a supply management program proposed by the Vermont Milk Commission, each proposal called for a milk pricing structure that would discourage expansion of milk production.
This, according to each proposal, should stabilize a dairy industry currently struggling with five years of milk prices set below the cost of production.
A nationwide call for a supply management program is not new.
During a previous collapse in dairy prices, Holstein Association USA, Wednesday’s Brattleboro-based hosts, hypothesized that supply management would likely be a necessity for the future of the dairy industry.
“Back in 2009, we looked to the future and realized the dairy community needed a comprehensive program to stabilize milk prices,” said the Holstein Association’s CEO, John Meyer. “We all experienced the peaks and valleys of milk prices that were the norm back at that time, but looking ahead, we could see there would likely be more valleys than peaks in milk prices going forward.”
Much of the nationwide advocacy for supply management at that time led to its proposed inclusion in the 2014 Farm Bill before ultimately sinking after then-Speaker of the House John Boehner famously derided supply management as “Soviet-style” agriculture.
Boehner was also a recipient of campaign contributions for the International Dairy Foods Association, which represents dairy processors, who purchase milk from farmers.
A supply management program’s roots stretched even further back, with former Highgate farmer Jacques Rainville saying he could trace his advocacy back several decades after seeing its impacts on his Quebecois neighbors two miles to the north.
While experts in the dairy industry have pinned some hope on U.S. dairy’s growing share of the export market, Meyer discouraged looking to exports as the industry’s savior. “Whether we want to admit it or not, we cannot expect the export market to be our silver bullet,” Meyer said.
“We’ve had 25 years of steadily increasing exports and here we are today,” O’Connor agreed.
“Times have changed, which means agriculture in the U.S. needs to be managed differently today than it was yesterday,” Meyer continued. “We simply can’t go on as we have.”
Among the proposals brought before Dairy Together’s Brattleboro conference was a short-term relief package prepared by NFO that recognized that there was an immediacy needed in salvaging the dairy industry and that it wasn’t every farm struggling with current trends.
Titled “the Family Dairy Farm Relief Act,” NFO’s proposal lead with the “staggering rate at which we are losing family-sized farms,” noting that, while the number dairy farms with more than 1,000 cows almost doubled since 2000, smaller farms were closing at a similarly dramatic rate.
That report also noted that numbers provided by the U.S. Dept. of Agriculture showed the operating costs for each farm were also unbalanced, with economies of scale clearly favoring the largest farms.
“We need to recognize the crisis now,” said NFO’s Michael Mackey of Ohio.
NFO’s proposed relief program promises to pay participants a monthly stipend based on the imbalance in operating costs between their level of production and farms with more than 2,000 cows, identified in their plan as the highest tier with the lowest average operating costs.
This structure is based on a slightly different relief program implemented in Maine, which, according to the Maine Dairy Industry Association’s Julie-Marie Bickford, was “based on essentially recognizing economy of scale.”
Maine’s “tier program,” according to Bickford, was funded indirectly through a separate milk handling fee on “every gallon of milk that enters the system at any point in the state of Maine.”
“There is a mechanism to get some funding [but] it doesn’t cover it all,” Bickford said. “It’s also a way to make sure everyone has a stake in the game,” as the processing fee impacts everyone from the processor to the consumer.
Bickford also asked Mackey to be careful when distinguishing small farms as “family farms,” as Maine’s largest farm – a 1,700-cow operation – was also a family farm, shared between 22 relatives of the same family.
“We can’t really sit here and just talk about change”
The FWU presented a study conducted by economists from the University of Wisconsin – Madison and Cornell University that projected how any of the supply management programs pitched for the 2014 Farm Bill may have played out under the dairy economy’s current conditions.
Researchers found the programs showed an increased average milk price and operating income on farms and a more stable industry overall.
That study also suggested that, under a supply management structure, there would have been fewer farms lost since a global oversupply triggered the current industry-wide crisis.
They also found that the cost to the federal government of supporting dairy farms would be below what is expected to occur with the Dairy Margin Coverage program reformed in the most recent Farm Bill with a supply management program.
“We wanted to be able to tell people this would make a difference,” O’Connor said of the study. “Now we know that it does.”
The details of a supply management program were debated between those present, like how USDA might implement a nationwide program or if supply management advocates should even rebrand their policy recommendations with terms like the NFO-proposed “structural management” or the Vermont Milk Commission’s “growth management.”
Those present acknowledged they may face an uphill fight in swaying Congress on the program, as statute would likely be required to reorganize federal dairy orders in favor of nationwide supply management.
It was, after all, in Congress that the House of Representatives struck a 2014 Farm Bill amendment in favor of a supply management program, observed Rainville.
During a recent visit from U.S. Secretary of Agriculture Sonny Perdue to a sugaring operation in Milton, Vt., Perdue dismissed the implementation of a “Canadian-type system,” saying, “I just don’t think the spirit of entrepreneurship and economic liberty in the United States really calls for a supply management system.”
It’s Perdue’s distinction of a “Canadian-type system” that leads at least O’Connor to believe national agriculture has a chance to convince Perdue to eventually acquiesce to a supply management program.
“He said ‘I’m not supportive of a Canada system,’” O’Connor said to the Messenger, noting that none of the proposals discussed in Brattleboro were built on a quota system the way Canada’s is. “This is very different.”
While the disagreements were minor, O’Connor and Mackey encouraged everyone present to continue pushing for some kind of a supply management program. They pointed attendees toward the Dairy Together movement’s social media accounts and website for petitions and resolutions in favor of such a program.
“We can’t really sit here and just talk about change,” O’Connor said. “This was an exercise in coming together and working together to improve our industry.”
Meanwhile, O’Connor confirmed to the Messenger that the struggles felt by Vermont’s farmers were shared in Wisconsin.
“There is not a week that goes by where I don’t talk to a dairy farmer who says ‘I don’t know whether I’ll be a dairy farmer next year,’” she said.
Stay informed. Subscribe to the Messenger.