Farmers Organize
As Milk Prices Plunge

Disastrously low milk prices —up to 33% lower than one year ago—are sparking a variety of initiatives in support of dairy farmers.

Farmers are banding together to form a bargaining unit, legislators are working on their behalf, milk cooperatives are looking for more opportunities, and local programs are aiming to increase milk consumption, all to benefit Vermont’s ailing dairy industry.

"Any farmer still in business right now is doing something right, but this crisis is shaking farmers—this time they can see the end coming," said Peter Sterling, coordinator for Dairy Farmers of Vermont. "We are fully expecting to lose 200 to 300 dairy farms in Vermont by the end of the summer."

Dairy Farmers of Vermont is a new coalition of farmers promoting the message that "something different needs to happen." Technical assistance and low interest loans are not enough. Farmers, Sterling stressed, need a better price for their product."

The group, headed by 12 energetic farmers and spokesperson Anthony Pollina, has already signed up 229 farmers, representing more than 610-million pounds of milk production. By the end of March, the organization hopes to represent farmers producing one-third of the state’s milk.

By joining together, farmers hope to get answers from the milk cooperatives "about the complexity of where milk goes when it leaves the farm and why the price is the way it is," Sterling said.

The farmers plan to use their "united voice" to work with cooperatives to get a better price for their milk, from the processors.

If this does not succeed, the group may start its own milk processing plant, with profits going directly back to the farmer. Anyone interested in information on this no-obligation "united voice" effort can contact Peter Sterling at 223-6767.

Other Support

The dairy industry structure is complex and many farmers feel powerless to affect their own income. In most instances, however, milk cooperatives work on farmers’ behalf to improve markets and, therefore, pricing.

Daine Bothfeld of St. Albans Cooperative Creamery said the co-op recently arranged an agreement with Dairy Farmers of America (DFA), which provides additional markets for Class I and fluid milk.

"In this way we are maintaining our individuality and autonomy, which our farmer members are more comfortable with, but gaining market access with Dairylea, DMS and DFA to market our milk collectively," Bothfeld said. "The more milk volume you have, the more bargaining power there is to affect the price, and that is what we are aiming at."

Efforts to increase milk consumption, by installing milk dispensing machines in schools, can also make a difference.

"This week, four schools in the Northeast Kingdom are receiving milk dispensing machines, so students have more choice for beverages," Bothfeld said. "This was a farmer-led initiative, with funds raised locally and donated by the Vermont Dairy Promotion Council."

Local efforts to install milk dispensing machines have been successful in other counties.

Orange County Sen. Mark MacDonald recently introduced into the Senate Agriculture Committee a bill which that would offer dairy cooperatives options that would make them more competitive.

The proposed bill would allow "cooperatives—including dairy cooperatives—to organize themselves in a different fashion if they so choose," MacDonald said. As a result, farmers might receive investment monies sooner than retirement.

Regional Power

Last Friday, agriculture commissioners, state Farm Bureau presidents, and dairy leaders gathered in Concord, N.H., to discuss strategies to increase milk prices in New England.

Four plans were developed, according to Vermont Farm Bureau President Clark Hinsdale III.

The first is to continue to lobby for reauthorization of the Northeast Dairy Compact.

A second option is to create a New England Compact without congressional approval. Hinsdale said this model uses a multi-state tax compact as a way to collect "taxes" on companies doing business in multiple states. Since milk is shipped interstate, this option is being considered, he said.

"We also discussed looking into a "Support New England Dairy Farms" campaign whereby retailers would charge an extra 25¢ per gallon, which would be pooled and paid directly to New England farmers," Hinsdale said.

"This would be a marketplace effort that would require creating a logo-branded campaign and getting retailers to agree to pay the extra quarter based on their invoices from their distributor."

The fourth option is "to get the milk supply under central control so we can bargain for and demand a higher price." Hinsdale said. This initiative is being spearheaded by the marketing arm of Dairy Farmers of America, marketing organization, Dairy Marketing Services (DMS).

"Farmers have always dreamed of having this degree of market power and it may become a reality under the DMS structure," Hinsdale said.

"Any of these initiatives" he added, "can help boost the price that farmers receive for their milk."

"We will exist and prosper in the future only based on the good will and support of the consumers of New England," Hinsdale said. "Simply put, no one else needs us."

By Gus Howe Johnson