Guest column: Dairy crisis needs action
What will it take for President Barack Obama and our congressional representatives to realize the catastrophe that is overtaking rural America as dairy farmers face prices that are lower than what we received in the 1970s? Every other week seems to bring news of another farm suicide, another lifelong dairy farmer out of business, and despair from farm families wondering how we're going to feed our kids with no money left for food. Yet our politicians and media seem utterly unaware of just how desperate the situation is.
For 20 years, since President Ronald Reagan deregulated the price of milk, dairy farmers have been on an emotional rollercoaster where the price is determined by only a few corporate entities. Farmers are receiving $9-10 per hundredweight for their milk when it costs us $20-30 per hundredweight to produce it. Conventional wisdom blames farmers for overproducing and oversupply, but food processors are importing massive amounts of inferior dairy substitutes, called milk protein concentrates, that are flooding the market and replacing our quality American dairy products. Consumers are not benefiting either from our misery. Milk and cheese prices at the grocery stores have certainly not dropped by 50 percent.
Meanwhile, Dean Foods, the largest fluid milk supplier in the country, doubled its first quarter profits to $76 million. Kraft Foods also saw its profits soar by an increased $60 million compared to last year. These are the corporate entities, along with our corrupt dairy cooperatives such as Dairy Farmers of America (DFA), responsible for milk prices crashing. In December, thanks to the hard work of the National Family Farm Coalition, DFA was fined $12 million for trading violations at the Chicago Mercantile Exchange, which is where much of our milk price is determined.
Farmers are not asking for welfare payments or a taxpayer bailout. We simply want to put an end to this corporate corruption. We need a new pricing system that isn't based on Wall Street shenanigans, but takes into account farmers' cost of production.
If we had a fair pricing system, there would be no need for taxpayers to spend billions in farm subsidies that only help to unfairly pad the profits of the likes of Kraft and Dean Foods.
At a rally on May 30 in Manchester, Iowa, 160 folks turned out to demand change with our dairy policies. We patiently sat in the hot sun for two hours as speakers from New York, Pennsylvania, Wisconsin, Minnesota and Iowa called for Congress and U.S. Department of Agriculture to take emergency actions.
Farm Aid is now circulating a petition asking that Secretary Tom Vilsack give farmers an emergency floor price of $18. This would force the corporations to pay us fairly.
Consumers concerned about us maintaining local milk supplies and fearing reliance on dairy imports should help us flood Congress and Secretary Vilsack's office with letters and faxes.
There is also a new bill introduced by Senators Bob Casey and Arlen Specter, S-889, the Federal Milk Marketing Improvement Act, that would replace our broken dairy pricing system with one that bases milk prices on a national cost of production.
The U.S. Department of Justice needs to complete its two-year investigation into Dairy Farmers of America and its attempts to monopolize markets and squeeze out farmers.
In many areas of the country, a dairy farmer has no one else to market their milk to except DFA since they have bought and merged with many other dairy cooperatives.
Dairy farmers are not only vital to making sure America has a safe and stable food supply, we are an integral part of the local economy. Feed grain suppliers, farm equipment sellers, veterinarians, local banks, all depend on the business of dairy farmers.
In Wisconsin where I farm, dairy employs 160,000 people and is a $20 billion industry. We have fewer than 60,000 remaining dairy farmers in the United States.
Many of us are facing imminent bankruptcy if the system does not change. And should we all become extinct, so will rural economies and communities across the country.
Paul Rozwadowski, a Wisconsin dairy farmer, is chair of the National Family Farm Coalitions Dairy Subcommittee.