I have spent two hours this morning calling Washington DC! Since word of Kraft and Dean Foods record profits last quarter and dairy farmers record losses, I have been perplexed! I have been bothered for a very long time about our price discovery system it’s accuracy and transparency in light of it being so thinly traded.
Our co-ops are stating that we are “short” milk in California they are worried about contracts. Yet we have not seen our milk prices rise or even the futures move yet. I am asking WHY? I mean if we are short and our product is needed…wouldn’t we get more money? The answer stated is always the same, “they have too much in their inventory”. So it begins to nag me again. Who’s inventory? Who’s reporting? Who is auditing?
So after many calls I got to speak with Mr. Colwell. He handles NASS Cold Storage Reports and explained who they survey. They only survey long term cold storage facilities that hold cheese and butter for more than 30 days. They don’t require distributors or exporters to report. He admitted that questions of “ownership” have come up. For example when it was purchased but held for aging. I asked if these reporters are subjected to audits. He stated “There is NO auditing function in place”. It is the “honor system”. I don’t know, I hate to be cynical, but I have a HUGE issue with this! Our banks audit our facilities! Do they think that greed and corruption could not breed when the reporters have no accountability? Any fraction of misreporting inventory is an indirect factor of the price we get!
We need to take action! I was told that we could request an “authority to audit” but might be declined due to funds. I can assure you that price support / MILC money would be better invested by the auditing and making these facilities accountable for their reported inventories.
I have left a message for American Marketing Services, Chief Economist of Dairy Programs, John Mengle (202)720-4664 to call me. I am going to directly ask what it will take to get a formal audit of cold storage inventories! I suggest that you do the same. If they get enough pressure, quite possibly, we can know the true numbers in the inventories and obtain an unbiased audit report!
Please forward this on and contact your co-op reps, industry reps, anyone that can put pressure for these audits. These audits are our right. It is our livelihood at word of those making record profits while we struggle to feed our cows!
PLEASE sit back no longer! ACTION is what we need!