Home
Hay Making
Hay Cost
Shipping
Raw Milk
Our Dairy Plan
Hay Sample
Links
Farm History
About Us
| The dairy industry problems and solutions
Today
essentially all milk is
taken to a milk processor for pasteurization then to the
retailer. This system has created a monopoly
system with the price of milk set by the Federal order. The
Federal order price over the years has continued to reduce the
price the farmer received for his milk. Over the past 30 years
the price paid to the farmer has decreased continuously. The average
milk price for 2009 was $11.38/100. The projected price of
milk for the
coming year 2010 is projected to be less than $16/100. The
typical dairy farm needs to make $18-20/100 just to break even.
If
you take the price
of milk in 1980 ( $15/100 lbs) and scale it using the Consumer price
index to 2009 the present price to the farmer should be $42/100
lbs. If the farmer could get this price you would see
the family farm return. The
farmer in 1980 got 50% of the retail price now he get 25%. If
the farmer got $42/100 for his milk, then the retail price of
milk in the store would be $6.88/gal at 50% and $13.77 at 50%.
The government has suceeded in keeping the price of milk low for the
consumer but has done so by taking advantage of the farmer.
The milk price in the store would have to go up for the farmer to make a
profitable wage. The government has keep the price of milk low at
a unsustainable price for too long.
Dean foods the
largest dairy processor
was complaining that
is was losing money in 2008 when it had to pay the farmer $21/100 lbs
and used
this increase to justify the increase of milk to the
consumer. Milk price has gone up over 30% to the consumer in
2008, but not to the farmer.
The Federal order pricing system
has successed in reducing the family farm dramatically. The
disappearance of the family farm is not because the farmer failed, or
he/she was not a good farmer it is because the Federal order
system put them out of business. When you buy raw milk directly from your farmer you are helping
the small farmer and his community and not supporting the large food agribusniess and the dairy processor.
Expect
to pay $6 to $10/gal for raw milk, remember the raw milk farmer
need to make profit to stay in business. If the dairy farmer
got a fair profitiable wage, milk in the store would be at least this
high. The raw milk dairy is not charging too much, its just the
milk in the store is to cheap.
Suggestion for any Dairy Farmer that reads this: Join a dairy union and Strike
It
is my belief, that the government will never fix low price to the
farmer. The government goal is to have low consumer
food prices as part of its cheap food policey. The government has
not fixed low prices to the farmer in over 30 years but
they have continued to talk about the loss of the family farm for
decades. The goverment gives subsities to the farmers but these
are not enought for the farmer to become profitable. The goverment does not want to increase
milk prices to the consumer that would make them look bad.
The
retailer and the dairy processor want to continue these low
milk
prices from the farmer so that they can charge high retail
prices to
continue the large profit margins. They are not
about to give more money to the famer and reduce thier profit
margins.
There
is only one hope to change
the low milk price to the farmer and that is to increase the retail
price of milk. The governemt and the dairy processor do not want this
to happen. The is only one solution to make this happen and that
is the famer must unity in a dairy farmer union and force this
change. Farmers need to
understand that they need to unite in common goal to change the Federal
order pricing. As time goes on and
more dairy farms disappear at a rate of 5% per year (28 percent in 5
years) when will the farmer realize that he must fight now if he want
the family farm to continue.
I believe at this time a dairy farmer union has a high likelyhood of sucess than in any other time in milk history. A
dairy farmers union can be created using the Internet. The
internet can unity farmers in distant places with little time to
meet and organize
about their common problem and its solution.
Today the
dairy processor are also more venerable because of the centralization
of processing plants and the decreased number of farms. The
excess milk supply is close to only 1 percent. Remember they say
there is a excess milk to drive prices down but the processor buy all
they milk they can. A minor change in milk supply has a
marked effect on processor and there is little back supply due to
limits farms. In truth
today if the supply was interrupted for a short period the effect would
be felt nearly immediately because there is no longer a excess of
farms. The farmer need to use the power of this bulk tank to take
control of milk pricing. If the farmer organized and controlled
the milk supply,
just like OPEC does to oil prices things would change. If
you are not
aware the German dairy farmer's had a strike this past summer and
they
dictated the price of milk and the consumer were with them.
Gerally the consumer will side with the farmer
because they understand how they have been
mistreated over the last 30 years. Dairy farmer need
to organize now. The last strike of any dairy farmers was in
1939, we need to bring it back in the USA. A dairy farmers union has
the potential to make dairy farming a profitiable enterprise, but the
farmer needs to act now before there is no one left.
| | |
|