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Trade, Farm Bill, co-op structure challenges eyed at dairy conference.

Article Excerpt
How important are the World Trade Organization talks for U.S. dairy cooperatives and their members? "Either we have a place at the table, or we'll be on the menu," is how Jerry Kozak, CEO of the National Milk Producers Federation (NMPF), put it in his address to the joint annual meeting of NMPF, the United Dairy Industry Association and National Dairy Promotion and Research Board in December.

NMPF lobbying efforts have been based on the stance that there can be no dairy trade deal if the European Union makes only incremental cuts in its subsidies and import tariffs, which are much higher than those in the United States, he stressed. Still, the industry's very willingness to even discuss possible reductions in a 50-year-old support program--under which the U.S. government pays more than $4 billion annually to support the dairy industry --represents something of a shift toward greater flexibility on free trade.

And how much is at stake for producers as the 2007 Farm Bill takes shape? "Either we get our ducks in a row, or we'll be sitting ducks," Kozak warned, noting that agriculture is bracing for farm program reductions and that the dairy industry needs to be united and proactive to keep the budget ax from swinging its way.

Environmental issues--including potentially stricter air and water quality controls--will play a part in the Farm Bill debate, Kozak said. Food security and the war on terrorism, animal welfare and product standards and labeling will also be in the mix more so than in past Farm Bills.

Another fundamental challenge facing producers comes from "people outside the industry who would like to dismantle the cooperative business structure," he said. This would have "extremely serious consequences for farmers and the industry," Kozak continued. "Now is the time to rally around the cooperative structure and take advantage of the magic of cooperatives and the Capper-Volstead Act. We need to take advantage of cooperative unity for the benefit of all producers."

CWT & market gains

As sobering as those thoughts were for the 1,100 or so producers and guests gathered at the meeting in San Francisco, there were also many achievements in 2005 to look back on and cheer. After three successful bidding rounds of the CWT (Cooperatives Working Together) program, 74 percent of the nation's milk production is enrolled in this industry self-help effort to stabilize on-farm milk prices by better balancing supply and demand. In 2006, the CWT focus will likely shift from voluntary herd reductions to boosting the export-enhancement component of the program, Kozak noted.

NMPF Board Chairman Charles Beckendorf said the 5 cents per hundredweight producers contribute (on a voluntary basis) toward the CWT program is "the best nickel you could ever spend." Last year, CWT removed 900 million pounds of excess milk from the market, he noted.

Dairy Management Inc. CEO Thomas Gallagher recounted gains in dairy research and promotion, many of which were achieved through investment of producers' Dairy Checkoff dollars. Topping the good news on the nutrition front was the revised U.S. Dietary Guidelines, which keep dairy as its own food group and boosts the recommendation from twice-daily to thrice-daily consumption of dairy foods for adults and children.

Yogurt was the retail star for the industry in 2005, with sales that climbed...