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Farmers push co-ops for dairy overhaul

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Posted on October 12, 2009 |
By Kathryn Flagg



ADDISON COUNTY — Farmers in Addison County may be rallying behind milk price stabilization plans, but some of the dairy co-ops that collect and market their milk have been slow to the table.

Now, frustrated by what Orwell farmer Tom Audet dubbed the “sluggish” response of dairy cooperatives, many of those farmers are chastising their co-ops for failing to take strong stands on supply management programs.

“This is a whole new way of thinking. (Co-ops are) not used to working from the bottom up,” said Bridport farmer Marie Audet (a cousin by marriage to Tom). She noted co-ops are used to taking their direction from national organizations like the National Milk Producers Federation rather than individual farmers.

“I think they’re all scared to make a bad decision,” she said, “but at this point making no decision and not being a leader is a big mistake.”

Of the two major co-ops in the region — Massachusetts-based Agri-Mark and the St. Albans Cooperative Creamery — the St. Albans co-op has already thrown its support behind the concept of a milk price stabilization program, not unlike the plan most local farmers in favor of supply management have championed.

There is demonstrated support for some form of supply management among Addison County farmers. At an August meeting on the subject at the American Legion in Middlebury, the vast majority of the nearly 100 farmers on hand agreed that moving forward with a such a plan is a good option for farmers who are otherwise helpless against volatile swings in the price paid for milk.

The proposed program (championed by the Holstein Association and Dairy Farmers Working Together, among others) would establish production “bases” for farms and, farmers hope, eliminate wild swings in milk prices typically caused by the oversupply of milk on the market.

In late August, the St. Albans coop board issued a brief statement voicing support for mandatory, radical changes in the dairy industry as a way to keep farmers afloat.

So far, Agri-Mark has no official position on supply management programs, according to Neal Rae, a New York farmer and the chairman of the Agri-Mark board of directors.

Rae said the co-op’s size and diversity of opinions among its members, makes taking up an official stance on supply management tricky. But Rae said the co-op may look at polling its membership to determine whether or not there is widespread support for such a program.

That sort of consideration isn’t coming fast enough for Tom Audet, who continues to push the co-op’s leaders to consider supply management programs. He did commend local Agri-Mark director Bob Foster, a Middlebury farmer, for his work on the supply management front. But by and large, Audet said, he’s been disappointed by how slowly Agri-Mark is moving toward policy recommendations of any type.

Audet milks 230 cows in Orwell with his brother, a partner in his business. He describes himself as a strong supporter of supply management, and said he came out of the gate early this spring at the Agri-Mark annual meeting to push the co-op toward embracing a supply management plan. He’s also been a member of the Agri-Mark cooperative for more than 30 years.

But he hasn’t seen any results yet, and said the co-op leaders are “dragging their feet.”

“The co-ops have been so sluggish to really represent farmers who want a supply management system,” said Audet.

TAKING IT SLOW
Cornwall dairy farmer John Roberts said he understands the delay, at least in part.

“We’ve had crises in the past, and a lot of excitement has been generated that we must do something,” Roberts said. “Then suddenly when prices improved all that energy, like hot air, just disappeared.”

Roberts explained that individuals have leapt to the front of the “parade they thought they were leading,” only to realize no one else had lined up behind the flag.

That said, Roberts and other farmers agree that the current milk price crash constitutes a disaster for farmers more widespread than ever before.

In the meantime, farmers claim that co-ops are, by and large, holding on to the old release valves in the milk pricing system: programs that have, in the past, tried to drive up prices during downturns by cutting supply.

One prime example is the Cooperatives Working Together (CWT) program. Farmers pay into a pot of money that funds CWT, and when milk prices crash, the program organizes occasional herd buyouts. Farmers can then put in a bid to retire their herd. If their bid is accepted, the program reimburses farmer for a year’s worth of milk they agree not to produce, plus whatever price their herd brings in at slaughter.

On Oct. 1, CWT announced its third herd buyout for 2009. The last three rounds of the program — one in late 2008, and the two so far this year — have culled 226,000 dairy cows from the nation’s herd.

Bids for the latest “herd retirement,” as CWT dubs it, are due by Oct. 15. The conventional wisdom behind CWT is that buying out farmers’ herds, and slaughtering those cows, will drive the supply of milk down and the price of the commodity up.

Roberts described the CWT program as a short-term “intervention,” not a solution. It’s also a public relations nightmare for farmers, he went on.

And Tom Audet thinks that programs like CWT just aren’t as effective as they used to be. The program is only a few years old, and was championed early on. But CWT’s success, he said, coincided with a “perfect storm” for U.S. dairy farms. Export markets were booming, and a drought in New Zealand and Australia meant competitors abroad couldn’t feed the expanding Asian markets.

“The old fixes just aren’t going to respond like they used to,” Audet said.

PUSHING FOR CHANGE
Tom Audet and Bridport farmer Marie Audet agreed that the hesitation from the co-ops boils down to caution.

“There’s comfort in the old system, because they know how it worked,” Tom Audet said.

Neither advocated throwing caution to the wind, but both farmers did say that the time for waiting is over.

“I think the new economy that we’re facing in the future is not going to allow us this ‘wait and see’ attitude,” Tom Audet said. “The system that we have now just does not respond quickly enough to this surplus situation.”

And the current surplus situation isn’t an anomaly. Tom Audet and Roberts both worried about what will happen as sexed semen — a technology that allows farmers to produce only heifers when breeding — grows more and more popular, swelling the country’s milking herd.

In lieu of action from the co-op, farmers are turning to other avenues to make sure their voices are heard.

Audet said he makes frequent telephone calls to Vermont’s elected officials. Last week those elected officials in Congress helped approve $350 million in emergency aid for dairy farmers, but that’s not the sort of help Audet, for one, is looking for.

“We figure for the year that our industry is going to be short $7 billion,” Audet said. He and farmers like him have been borrowing money for months to stay afloat, and $350 million — just $290 million of which will go into milk checks to farmers — is a band-aid. Audet said he didn’t want to seem unappreciative of the aid, but said that the federal emergency funding is a “far cry from what’s really needed to stem the flow.”

The government aside, ask some local farmers, and they’ll argue that the co-ops have to be at the forefront of the supply management debate in order for any changes to be made. New Haven farmer Phil Livingston, who belongs to the St. Albans co-op, complained it took his cooperative nine months to issue its one-paragraph statement on supply management.

“The co-ops are suppose to get us a fair price for our milk,” Livingston said. “They’re standing there being price takers instead of price makers.

“Right now, as we stand right at this current moment, the farmers across the country want to join a supply management program, and the only thing holding us back is our co-ops,” Livingston said. “We have congressional support all across the country, and yet the only ones that are holding this whole thing back are the co-ops.”

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