As their industry faces its worst crisis in decades, the nation’s dairy farmers appear to be finally setting aside their regional disputes. More than 500 people attended a Dairy Workshop, convened by the U.S. Department of Agriculture and the U.S. Department of Justice, on Friday at the Memorial Union of the University of Wisconsin in Madison. Dairy farmers from around the country put on a unified, during a forum with U.S. Agriculture Secretary Tom Vilsack and Assistant Attorney General Christine Varney. California dairy farmer Joaquin Contente said prices per hundredweight are the worst in decades. “The average price for 2009 in the United States was around $12.80. In my area it was a lot lower than that. We all needed at least $18,” Contente said during a panel discussion.
Darin Von Ruden, who farms near Westby and serves as president of the Wisconsin Farmers Union, chocked up as he speculated on the future of his family’s farm. “My folks didn’t want me to farm, because of the economics,” said Von Ruden. “It’s all about economics. It’s a great place to grow a family. I’ve got a sixteen year-old son and an eleven year-old daughter, and I would like to see one of them take over the farm. But can they?”
The pressures on dairy farmers are becoming too much for some, according to Joel Greeno, who farms near Kendall in Monroe County. “In mid January in New York state, a dairy farmer shot 51 of cows and then himself,” said Greeno. “We know of at least 100 dairy farmers to date who have committed suicide since the ’08 crash. It’s gotta stop. Dairy farmers deserve dignity. The deserve fair prices. They deserve cost of production plus a profit.”
Comments made by elected representatives at Friday’s daylong event at Memorial Union on the University of Madison campus underscore the complexity of the dairy industry – and finding out why farmers are getting the short end of the stick. “The farmer’s share has continued to shrink, and many farmers and other dairy industry observers suspect that someone between the farm and the consumer is taking a bigger slice than they really should,” said Wisconsin Senator Russ Feingold. “We are coming off a year when dairy farmers were losing $100 per cow, per month, for many months in a row, while consumers were often not seeing a drop in prices at the store. At the same time some of the entities in the middle of supply chain were posting massive profits.” But Feingold noted that the industry is very complex and “it’s difficult to target a specific culprit behind this unfair situation.”
Still, if there was one specific culprit which seemed to be identified in the minds of farmers, it would have to be the Chicago Mercantile Exchange. Wisconsin Senator Herb Kohl noted that the volume of cheese traded on the exchange represents less than one percent of all U.S. cheese production – and that’s a problem. “That spot market sets the price directly and indirectly for almost all the cheese and milk in our country,” explained Kohl. “This is a situation were the tail controlled by a few traders in Chicago can and often does wag the dog of the market for milk all across our country.” Kohl called for closer scrutiny and regulation of the cheese market by federal regulators. Greeno, the Monroe County dairy farmer, agreed. “All volatility in milk pricing is caused by the CME. The CME cheese trading is a highly leveraged, thinly traded market with few players,” said Greeno, who claimed that only two companies are regularly involved. “Two players do not make a market, and at least not a true market indicator,” said Greeno, who echoed Kohl’s call for closer federal regulation.
So what’s next? Vilsack spoke with reporters during a break in Friday’s workshop. “The fact that we’ve gone in ten years from 111,000 dairy farms in this country to 65,000 isn’t just because people have gotten more efficient,” said Vilsack. “I think we heard today the difficulties that many producers both large and small have in a marketplace that they feel is not responsive, and not as balanced as it needs to be.” Vilsack noted a new consistency in the message from dairy farmers, with less focus on regionalism. “That is significant, and that is how you will affect change. The crisis is moving people to consensus.”
On the subject of the Chicago Mercantile Exchange, Varney said Friday’s session provided new insight into the concerns of dairy farmers. “I’m fairly certain that when we get back to Washington there will be a conversation about CME. Are we out here making a list? No, but when people bring us information, we will follow up.” Friday’s event in Wisconsin was the third in a series of five planned Department of Justice/USDA workshops to discuss competition and regulatory issues in the agriculture industry. A workshop held in March in Ankenny, Iowa dealt with crop farming and seed, while a May workshop in Normal, Alabama, focused on poultry. Upcoming workshops, in Colorado in August and Washington D.C. in December, will focus on livestock and margins – Department of Justice/USDA workshops ever to be held to discuss competition and regulatory issues in the agriculture industry.