Attendees heard from retired University of Minnesota Professor Dr. Richard A. Levins. He focused on a short-term plan to support family farmers by paying out the difference of operating costs in milk prices for large and small farmers, since small farmers typically have higher costs of production than large farms. Levins aimed to level the playing field, saying it is “bad economics to get rid of people as competent as the farmers we have.” His proposal would be implemented in conjunction with a longer-term plan.
NFO Director of Operations Dave Kaseno presented his organization’s idea, which is to extend the Federal Milk Marketing Orders nationwide
Cornell professor Chuck Nicholson and University of Wisconsin-Madison professor Mark Stephenson analyzed three proposed options for dairy supply management. The first options were programs with an allowable annual production growth amount and a market access fee per hundred weight for expansions exceeding this allowable growth. There are two versions, one with continuous regulation and one where the market access fee and regulations are triggered by price. The other program is a marginal milk program.
The two economists analyzed their implementation as if they had been included in the 2014 Farm Bill. The programs generally showed reduced variation, enhanced prices and increased incomes. One negative impact is a possible decrease in domestic dairy sales, though we were assured this small decrease is only because of a higher price and would be overridden by positive impacts.
Minnesota dairy farmers, bankers and other stakeholders had a productive conversation about the future of the industry. While it is still hard to find the perfect solution to help our farmers, the speakers wanted to share that these proposals are seriously worth considering. Today’s farmers are ready for change, and Farmers Union believes there is enough space in the market for farmers and consumers to all do well.
To learn more about Dairy Together, go to www.dairytogether.com.