- Support and pass the Dayton/Obey Dairy Trade Bill;
- Pass a moratorium on agribusiness mergers to curb further
concentration and consolidation of agriculture;
- Support a Fair Price for dairy producers that reflects the cost of production and ensures a livable income.
In Wisconsin, home of Family Farm Defenders and Cedar Grove Cheese, an average of five families are forced off their farm each day. These include struggling families who operate small and mid-sized dairies. In the U.S., between 1987 and 1997, the number of dairy farms declined by 42 percent, and fell an additional 5 percent in just one year from 1999 to 2000. Increasingly, small and mid-sized dairy farms are being replaced by large, mostly corporate, operations. Despite the decline in total farms, the growing number of huge corporate dairy farms has caused actual milk production to go up by nearly 8 percent. In California, one of the largest dairy producing states, the average dairy herd is 500 or more, compared with a national average of 82 cows.
Price
Dairy prices, based on a hundred pounds of raw liquid milk (cwt), were unpredictable through out the last decade. Today, milk prices are relatively strong at about $15 per cwt. Last year, however, prices dropped as low as $10 to $9 cwt. Though todays prices are an improvement from a year ago, farmers still operate at a significant loss. The cost of production for a small producer in Central Wisconsin per cwt is conservatively estimated at $21.
Dairy farmers receive price support payments that are intended to offer them a safety net when prices drop. When milk falls below a predetermined price, today set at $9.90, they receive income support payments to make up the difference between the actual price. For example, when prices drop to $9 producers receive .90 cents for each cwt of milk they sold. When the cost of production is more than double the federal income support price, it is clear that this program provides no kind of safety net at all.
Prospects for reauthorization of these price support payments are not expected to see a significant increase. In the Farm Security Act (H.R. 2646) recently introduced in the House, payment levels were again set at $9.90. Producers today are stuck with milk prices that are lower in real terms than in the 1930's during the great depression, are paying 2000 level costs of production and are being squashed by corporate agriculture with the support of the USDA and Congress.
THE JUICY TRUTH
Corporate Concentration and Producer Control
Like other farmers, dairy producers are frequently shut out of markets due to increased horizontal and vertical concentration (see April Juicer). Producers who sell their milk to distributors are forced to accept the price that those distributors offer, regardless of their own costs. Cornered by a perishable product and limited access to markets, they sell their milk and operate at a loss. As small farmers get shut out and shut down, corporate operations who maintain larger herds and produce at lower costs take over. Often these mega dairies are directly connected to distribution firms, if not jointly owned, and can afford to lose money on production because they make it up in retail. Retail mark-up on milk can be 100 percent or more. The farmers share from the sale of a gallon of milk that you would buy at the grocery store for $2.89 is $1.00 (based N.VA retail prices and USDA reporting from February 2000).
Federal payments that go to producers barely help them to get by, if they help them at all, and instead serve as a subsidy to ensure that distributors and retail chains have a large supply of cheap milk. Small and mid-sized operations that manage to stay in business sell milk to distributors below cost. Distributors then push up the price and funnel profits to CEO's.
In the North East, U.S milk producers have found a way to ensure a better price for their milk. Dairy producers have formed a "Dairy Compact" with consumers that ensures that they get better returns on their liquid milk (the kind that you put in your free trade coffee) and limits milk coming in from other regions. Consumers pay an additional .18 cents per gallon that goes directly to producers. Producers from outside the region are required to pay additional fees, that once combined with transportation expenses make selling milk in the NE undesirable.
Farmers in the region are hoping to renew the compact, which expires at the end of September. While many producers outside the region oppose compacts because they favor regional producers over others and limit markets, many small and mid-sized operators favor them, as do many consumer and environmental groups. Compacts ensure that farmers have priority to sell their milk locally, decrease transportation needs and expenses and offer consumers a more fresh product.
What's in Your Cheese?!
The increasing trend to use Milk Protein Concentrates (MPC's) in producing cheese is threatening dairy farmers as well as consumers. MPC's consist of powdered milk products that are contain high levels of condensed milk proteins. Used by large producers, such as Kraft, in cheese, frozen deserts, bakery goods, sports drinks, cocoa and many other products, MPC's are high in protein and lactose free. If you look at the wrapper on your Kraft Singles in your refrigerator right now you will see MPC's listed in the ingredients.
What does this mean for producers? Limits are set on dry milk imports specifically to protect domestic markets for U.S. producers. Unlike with regular dry milk, their are no FDA or USDA definitions of or standards for MPCs, no restriction on what they can contain, and no limits on the amount of MPCs that can be imported into the U.S. Currently, MPC's are being imported into the U.S. in huge volumes as a "chemical" as a way to bypass import restrictions on dry milk imports. Once they hit shore, they saturate the dairy market, substituting for domestic liquid and dry milk.
What does this mean for consumer? Without a definition MPC's and set FDA or USDA standards, shipments of MPCs are able to by pass safety and health inspections. Corporations, such as Kraft, contend that MPC's are perfectly safe because they contain dehydrated milk protein , and do not consider it important to identify what the specific content of these MPC's are. However, many people are concerned about MPC's freely flowing into the domestic food system without being monitored. Without being inspected and properly labeled it is impossible to know the origin of MPC's or to guarantee that they are safe. MPC's are imported in great quantity, for example, from Eastern and Western Europe where recent out breaks of Mad Cow and Hoof and Mouth have raised health concerns.
What's being done? Senator Mark Dayton (D-MN) and Representative David Obey (D-WI) have introduced matching bills in the House and Senate (H.R. 1786 and S. 847) to impose tariff quotas on the import of MPC's. The bills also require that milk proteins being imported for food production be labeled as food rather than chemicals, and limits the amount that can be imported.
THE SEPTEMBER SQUEEZE
Protect Dairy Farmers and Consumers
We are asking the Senate to:
What you can do:
- Contact your Representatives and Senators and ask them to support
the Dayton/Obey Dairy Trade Bill;
- Write to the USDA and FDA, tell them that you are concerned with
the Safety of MPCs and demand that they take action to properly
label and inspect MPCs being imported for use in food
production;
- Keep an eye out for new legislation on Dairy Compacts coming
up that affect your region;
- Support local family owned dairies in your area.
Be Part of Our Campaign for Food n’ Justice,
visit www.ruralco.org.
Questions on food and farm policy?
Contact Heather Fenney at (202) 628-7160.
To join or support our work:
Rural Coalition/Coalición Rural
1012 14th Street, NW Suite 1100
Washington, DC 20005
(202) 628-7160
Visit www.Ruralco.org or
www.SuperMarketCoop.com.