4.28.2010

Letter to the Editor

From Loren Lopes

California dairy producers have been selling their milk below the cost of production starting 2008 for the past twenty four months. In 2009 all the cooperatives and private plants in California imposed production bases for production in 2007. We reduced production by 5% and still have not seen any price relief. This state has lost $17 billion do to lost revenue from the dairy industry do to low farm prices below the cost of production. California lost 109 dairy farmers in 2009. California dairies average around 1,000 cows per herd but still have smaller herds of 200 cows they have all been below the cost of production. Scales of economy have not had any positive effect against these low milk prices. The prices are fixed below the cost of production through long term contracts months in advance. Cooperatives and private processors costs are covered by a make allowance so they can afford to sell cheap and long. These low prices determine the dairy farmer’s price of milk. Many dairy related business have been affected by these low milk prices, they also are having difficulty getting credit from banks as are the dairy farmers. Dairy food companies such as Deans and Kraft are making record profits as they drive dairy farmers out of business. They took our equity and next it will be our property. International Dairy Foods Association and National Milk Producers Federation are wheeling the power in the halls of Congress and the White House. They are now proposing income insurance for dairy farmers instead of an established milk price floored at the cost of production. This program is seen as snake oil policy by many dairy farmers and dairy experts. They want to terminate the dairy price support program, MILC payments and the Federal Milk Marketing Orders to be replaced with a completely free market take over. For those that can please help save the dairy farmer of the United States by calling your members of Congress and opposing this bad dairy policy by NMPF.  

All indications are according to experts that milk prices are now fixed below the cost of production through 2010.  

Secretary Vilsack must take immediate action to raise the support price to the cost of production under his authority. The support price should be floored at least at $17.00 cwt. to keep the dairy farmers above this level. 

  A new method of pricing milk to the dairy farmer must be established that equates to the cost of production if we are to sustain a dairy industry in the United States .  

The long term solution must be S-1645 (Specter-Casey Dairy Bill). This is the most comprehensive dairy bill that has been presented. This bill prices milk by the USDA/ERS cost of production, balances imports and exports, and allows the implementation of a two stage supply management plan. This bill does not cost the government anything.  

Loren Lopes California dairy farmer

Member of California Dairies Inc.

619 S. Vincent Rd. Turlock California 95380

Ldairy@aol.com

209-632-7225