Processors Report Record Profits-While Watching the Demise of Dairy Farmers! Why Aren’t We Having A “COW”?

We Need to Re-Gain our Power-History Needs to Repeat Itself!

  Last year the New York City Food Museum did a story on the history of milk strikes and consumers and farmers working together.

We should consider having history repeat itself! All of the work done back then by dairy farmers to gain control has truly been lost! Our nation’s dairy farmers suffer at the hands of corruption and manipulated markets. I post this as I just read that Dean Foods, Kraft, and all major dairy cooperatives have reported another quarter of profits, most reported yet again record profits. All this profit while dairies are in financial dispair.

 In Canada, the consumers pay the same for their dairy products and we do here in the US. In Canada, dairy farmers receive about $24.00 per hundred weight. US dairy farmers are receiving about $11.50. It doesn’t take a genius to figure out that the “middle man” is making all of the profit! I don’t mind processors making a profit…but it should not be at the demise of the dairy farmer.

 http://www.nyfoodmuseum.org/milk/index.php

I encourage you to check out the attached link to the NY Food Museum and read about the milk strikes back in depression. My New York dairy farmer friend, Lorraine Lewandrowski sent this out to dairy farmers and I thought I would share it with you.

She is a great activist and believes like I, that we must unite…from “Coast to Coast”, dairy farmers must take back our control of OUR product which we work so hard to bring to the consumers. It is all of our risk. It is all of our blood, sweat, and tears..yet we don’t know what price we are going to get at the end of the month!

Another dairy farmer friend and activist, Evelyn Borba of Turlock, has a quote on every email she sends out and it says… (Funny, I have never personally met Evelyn or Lorraine but communicate with them via e-mail and social media and do feel them as friends and appreciate what they do for our industry)

“It’s sad when in an industry, your only hope is to be the last man standing.”

– Dairy Farmer from Chino, CA        

This really says it all doesn’t it? I do believe in free enterprise…BUT free enterprise only works properly if dealing in a fair and non-manipulated market….that is not what us dairy farmers are dealing with. Re-gaining control means regaining control of our SUPPLY!

Let us stop and not wait to see who the last man standing is going to be!

 

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Letter to Congress : Dairy Crisis; Lets Fix the Injustices!

September 29, 2009 

Lady Justice

To: Members of Congress

 

My faith in my industry leaders and co-ops is greatly shaken. This is why I muster enough confidence to  write to you on my behalf and for the behalf of the hard working dairy farmers in our nation that have had to endure these difficult times and lay mercifully at the hands of those who are to be representing us and looking out for “best interests”.

 

I am a third generation dairy farmer married to a third generation dairy farmer. We have experienced highs and lows in the past but now the highs are very short lived and the lows carry on for months and months. Dairy farmers have been in the worst economic situation since the Great Depression. Yet, I sit here today and we are short milk nationwide with the price that we receive still below the cost of production.

 

Did our leaders not see this coming?  We have just completed retiring many healthy cows because there was too much milk, yet we are now bringing milk from Kansas and Oklahoma to California. That doesn’t make any sense!

 

We do know that Kraft and Dean Foods both recorded record profits. We also know that retail prices for Cheddar was up 4%, Ice Cream up 5%, American Processed Cheese down 1%, Butter down 14%, Fluid whole milk down 20% (Q-2 2009 vs Q-2 2008). Yet the U.S All-Milk price to farmers down 47%.  

 

Another injustice is the use of MPC’s in our domestic market. MPC imports are up and our milk price is down! It would make sense that we would restrict MPC’s from being used in our domestic supply. These MPC’s have a direct impact on our price at the Chicago Mercantile Exchange which is a thinly traded market. It would make sense to produce these MPC’s here in the United States.

 

We have been blessed to have $350 million allocated to help the dairy farmers. I urge you to use some of those funds to put dairy farmers on a level playing field with “Big Food”, co-ops, and processors.

 

Our milk price has not increase to date due to the “ample” inventory supplies. Dairy futures are driven by the NASS surveys. Only about 800 are required to report. With this reporting there is a two week lag time.

 

More disturbing to me is that there is NO AUDITING FUNCTION what so ever. Even a slight miscalculation of reporting is an indirect factor on our milk price. I would like to see some of the money allotted to help dairy farmers to go toward the implementation a mandatory auditing function and quite possibly to daily reporting which would add to much needed transparency and improvement of our price discovery.  The Beef/Pork producers have daily reporting with an auditing function that has worked very favorable for their industry.

 

As in all business, a balanced supply for demand is needed. We already have a faulty price discovery system with inventory reporting that has no accountability. With those factors in place it takes away our ability for necessary triggers that we need to balance our supply with demand. Dairy farmers are in a different situation than most, as we can not just “shut down” and not produce milk at the drop of a hat, as the health and well being of our cows are at stake. I think that many have benefited from this lag and lack of supply triggers.

 

I am also asking of you all, to help implement a National Supply Management Program. This will enable us to stay in alignment with demand. Highs and lows are inevitable at times but this will be manageable and keep us from devastation. It would put us on a level field. It would put us in a situation of control in our industry and relieve dependence of government assistance and alleviate the need to retire perfectly good and healthy animals to balance supply with demand.

 

I am asking you to please consider these solutions. Allow us to help ourselves by improving and changing the systems that are now in place. As most can agree, what we have now is failing miserably. It is time for change in our industry!

 

Thank you for your time and consideration.

 

Sincerely,

Barbara Martin

Tony Martin Dairy

6240 21^st Ave

Lemoore CA 93245

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Varney-Department of Justice! Why No Auditing?

(I urge you to ask WHY? (antitrust.atr@usdoj.gov)

Ms Varney. Thank you so very much for your support. I am a third  generation California dairy farmer married for 26 years to a third generation dairyfarmer NEVER have we seen business as bad as it is now and our loss has been great. I am not one that want subsidies or price support. I am grateful for those tools because without them things would be worse. I want to make a fair wage for our work. As you know, Our price is based on the CME which is very thinly traded with lack of transparency. I believe with all of my heart that their is NO way we can compete with the forces behind our price discovery system. I have been shut down by many but continue to push on. As my mother would say “something is stinkin’ in the wood pile”!

 

In California and other parts of the nation we are becoming short on milk. Many co-ops have requested dairy farmers to produce more milk with no assurance of our price going up (as of now, it takes about $17 per hundred weight of milk produce and we are receiving almost $11.00 average). The reason the milk price has not gone up more quickly (we were as low as $9.00 per hundred weight) is due to inventory reported in cold storage (cheese and butter).

 

As 30 day cold storage for cheese and butter they are required to report to NASS their inventories (There is approximately 800 facilities required to report). Their reports are available online. I had wanted to receive a copy of their audits of the inventories. I was told that there is NO AUDITING FUNCTION…none…none whatsoever!

 

I was shock and questioned why, if EVERY American reporting for taxes is accountable to report accurately because of the fear of an audit. Dairy farmers as most business are accountable to their banks by audits! Why would these companies be graced with the “honor system”.

 

I asked them at NASS and also AMS if ANY inaccuracy of inventory reporting could have an indirect factor on our milk price? The answer from both agencies was an astounding YES!  I was told that it would take an “Act of Legislation” to get an auditing function in place.

 

I just can not figure out why? By not being subjected to a formal auditing function they are not required to the same accountability that every other American is bound too!

 

I want an auditing function in place for those cold storage reporters of inventories of cheese and butter. It is what is fair to dairy farmers and to consumers as the end price paid by them.

 

You can look further into my request and more about me by looking at my blog www.dairygoddess.wordpress.com  Something just doesn’t seem right especially with the record profits of Dean Foods and Kraft as dairy farmers have been in great despair and the price to consumers has never been greatly reduced.

Sincerely!

Barbara Martin 🙂

Tony Martin Dairy

6240 21st Ave

Lemoore CA 93245

 

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Top Antitrust Enforcer Supports More Scrutiny of Dairy Industry

 

By LAUREN ETTER

ST. ALBANS, Vt. — The Justice Department’s top antitrust enforcer told a packed hall of dairy farmers here Saturday that increased concentration in the dairy industry merited a closer look by the department.

“Parts of the dairy industry have experienced extensive consolidation in recent years,” said Assistant Attorney General Christine Varney. As a result, “the potential for an exercise of buyer power has increased.”

Ms. Varney, who heads the Justice Department’s antitrust division, testified at the St. Albans City Hall before a Senate Judiciary Committee hearing held by Vermont Sens. Patrick Leahy, a Democrat, and Bernard Sanders, an independent.

At issue is whether or not some of the largest players in the dairy industry, including Dean Foods Co. of Dallas, a large milk processor, and Dairy Farmers of America Inc., a Kansas City, Mo., dairy-farmer cooperative, are exercising too much power in the market and causing farmers’ milk prices to be depressed. Mr. Sanders contends that Dean Foods controls up to 80% of the fluid-milk market in some regions of the country.

In a statement, Dean Foods says it buys less than 15% of the nation’s supply of raw fluid milk and 60% of that comes from independents and cooperatives other than Dairy Farmers of America.

“To suggest that we control the raw-milk market, or that we are the cause of low milk prices, makes no sense. For most of the milk we buy, we pay a price that is regulated by USDA, plus premiums,” Dean Foods said. The company said it hasn’t been contacted by the Justice Department regarding this issue.

Dairy Farmers said in a statement that while it is a major player in the industry, its scope and influence are often “inflated and misrepresented.” The cooperative said that in 2008, it marketed 61.2 billion pounds of milk, representing 32% of the total milk marketed in the country.

Dairy farmers nationwide are coping with historically low milk prices after a 36% drop in the past year to the lowest level in three decades. In 2007 and part of 2008, dairy farmers enjoyed high milk prices as a booming global economy boosted demand for milk around the world. Dairy farmers expanded their herds to cash in. Then, with the onset of the recession, demand for milk weakened and dairy farmers were left with an oversupply of milk, which depressed prices.

The dairy farmers that packed the town hall expressed frustration. “These are critically terrible times,” said Kylie Quesnel, 28 years old, a dairy farmer near St. Albans.

“While it is difficult to point to one cause of the dairy farmer’s plight, Dean Foods is posting record-setting profits” while “the prices for dairy farmers are at all-time lows,” Mr. Leahy said.

At the hearing, both senators asked Ms. Varney what type of action the Justice department would be willing to take if regulators found anticompetitive practices in the industry. “There is no doubt that we will prosecute that kind of activity should we find it,” she said.

Write to Lauren Etter at lauren.etter@wsj.com

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Demand Audits of Cheese/Butter Cold Storage Inventories!

Dairy farmers MUST work as a team…..”they” have been in control too long!

Demand Audits of Cheese/Butter Cold Storage Inventories!

 Call Dairy Programs Office of Chief Economist John Mengle 202-720-4664

 

Whether you are responsible of taking care of 100 cows or 10,000 cows, at the end of the day we are accountable for their well being and production. As business owners, we are accountable to our banks, co-ops, and government to report accurately our numbers of production and income. We are subjected to audits from any of these entities to report accurately at our expense. After all our compliance, our product is recorded and documented. The milk we produce then leaves our dairies and our end price is left at the hands of those who purchase and manufacture our product for profit.

 I ask this very simple question. Why are those who purchase our product and have the responsibility to report those inventories, (Cheese/Butter), to the government (NASS Cold Storage) NOT required to have scheduled and mandatory audits? No audits, none…ever! Even a slight error in this reporting can have an indirect affect on our milk price. (Some of these companies have reported record profits this past quarter).

 It then brings me to ask another question, who is opposing these audits? If they are following proper reporting procedures as set by the guidelines then I do not see why there would be opposition to comply with audits.

 I am urging each of us to contact legislation, co-ops, and industry representatives to demand that reported government inventories have mandatory audits from an outside agency. I am grateful for MILC and other government assistance. I would like to see some of that money go towards these audits. It would assist in supply vs. demand triggers that eventually hinder our bottom line.

 At the end of the day our price, as in any business, is based on market demand. We must work towards the stabilization of our supply to be sync with demand. I don’t know of any business that wants the burden to produce more to remain unprofitable.

 Call for mandatory audits of Cold Storage inventories!

 Thank you!

Barbara Martin

Tony Martin Dairy

Lemoore California

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No Auditing Function for Cold Storage Reports???

Trying to hang on to my “Pollyanna” but some things just don’t seem right!

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! 

 

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