The recently announced DFA-NE supply management plan is good, BUT NOT GOOD ENOUGH.
FINALLY, DFA management can no longer ignore that milk supply management is required now that milk has to be dumped.
DFA’s plan to pay “Full value” for 85% of March 2020 milk production and what ever the market will pay for any milk exceeding the 85% volume is not good enough.
It must be noted that “Full value” will not be a “profitable” dairy farmer milk price even for the 85% of production.
DFA management’s goal must be to balance the co-op milk intake with “profitable demand” from the marketplace for co-op member milk.
DFA management’s goal must be to implement policies that will continuously balance the co-op milk intake with marketplace demand that pays a profitable milk price to DFA co-op dairy farmer members.
DFA management’s goal must be to implement NDPO’s co-op management policies.
DFA dairy farmer owner members need to change THEIR DFA management personnel and/or policies and adopt NDPO’s co-op management policies which requires all DFA members to work “cooperatively” and share in a pro-rata, across-the-board, proportional milk reduction, as required, to continuously balance DFA’s milk intake with profitable demand for member milk, yielding a sustainable profitable milk price from the marketplace for most members and thereby preserve as many of the remaining DFA family farms as possible.
To learn more about NDPO’s co-op management policies, contact Mike Eby, NDPO Chairman, (717) 799-0057, firstname.lastname@example.org, or like us on Facebook – National Dairy Producers Organization, or www.nationaldairyproducersorganization.com
NDPO Board Member
Dairy farmer co-op management pay incentives are wrong.
Existing co-op management pay incentives are based on milk NOT members.
Existing co-op management are paid on ever increasing dairy sales and market share which requires ever increasing and cheaper milk, all at the expense of a profitable dairy farmer milk price.
NDPO encourages dairy farmer members to make an immediate change to pay incentives for THEIR co-op management.
Co-op management should NOT be paid based on milk volume but rather on whether the dairy farmer members receive a profitable milk price from the marketplace.
Co-op management pay should be based on the preservation of co-op dairy farmer membership receiving a profitable milk price NOT based on milk volume, dairy sales or market share.
Co-op management should profit ONLY when dairy farmer membership is maintained and dairy farmer members profit.
NDPO Board Member
Most U.S. dairy farmers object to the existing mandatory checkoff deduction from their milk check.
Let’s be clear about what the dairy industry bureaucrat recipients of dairy farmer checkoff money have done.
NMPF, IDFA, DMI and USDEC, all funded with dairy farmer money, have encouraged and accommodated the production of a milk supply in excess of profitable milk demand which has destroyed a profitable milk price for the U.S. dairy farmer.
The recipients have used the dairy farmer checkoff money to promote the making, sale and exporting of dairy products that have NOT paid the dairy farmer’s cost to make the milk used in those products.
The recipients of dairy farmer checkoff money have taken dairy farmer money and promoted excess milk production which has resulted in unprofitable milk prices for most dairy farmers.
NDPO requests the suspension of the mandatory milk checkoff deduction from U.S. dairy farmer milk checks for the anticipated duration of the effects of the current virus pandemic.
The requested suspension of the mandatory checkoff tax would allow U.S. dairy farmers to pursue checkoff reform and to immediately receive more of THEIR earned milk money and will go a long way in financially supporting every remaining U.S. dairy farm family struggling to survive.
National Dairy Producers Organization
Board of Directors
TO: Agriculture Secretary Sonny Perdue,
It is time for all of the “dairy industry” to share in the current U.S. economic pain, NOT JUST THE DAIRY FARMER.
NDPO urges the suspension of the mandatory milk checkoff deduction from U.S. dairy farmers for 18 months — the anticipated duration of the effects of the current virus pandemic.
The requested suspension of the mandatory checkoff tax, allowing dairy farmers to receive more of their earned milk money, will go a long way in financially supporting every remaining U.S. dairy farm family.
NDPO Board Member
Friday, April 3, 2020 CME class III closed showing May price at $12.18 and the Apr-Dec ’20 to average $14.19. Mr. Peter Vitaliano, chief economist at National Milk Producers Federation states in the below link “dairy difficulties to reverberate for several months”. Jim Mulhern, COO of National Milk Producers Federation in his April 1 newsletter states “…..and the guidance we received from our farmer and cooperative-leaders proved invaluable, as we set our policy and member-service priorities…..”. Other than asking for government handouts and reopening the (useless) 2020 Dairy Margin Coverage Program sign-up, was there a resolution passed to institute a national milk supply reduction to balance milk supply with ‘profitable’ demand? No. Please ask Mr. Vitaliano for his opinion on this idea.
It seems when dealing with the dairy industry, the producers’ pay price is always reduced to allow everyone in the industry to make a profit and/or lofty (guaranteed) salaries. Co-operatives, especially DFA should/cannot operate this way because Kansas law, Article 17-1602 7b states: Associations organized under this act shall be deemed non-profit, as they are not organized to make a profit for themselves or for their individual members, but only for their ‘members as producers’. DFA seemingly violates this law every day, and I’m sure the corporate folks will explain this away, BUT……….per USDA: “directors’ ‘standard of care’ would include, besides relying on co-op employees, the use of outside independent experts”. Therefore, DFA or any attorney DFA recommends likely lack independence to properly advise any board member on co-op issues. It is very well known that the board is very heavily influenced by DFA’s management. And yet, Rick Smith frequently stands behind the “actions of the board”.
Rick’s April 3rd “member update” does not suggest the obvious supply reduction concept and only discusses government solutions. An announcement by DFA tomorrow that it requiring a 5% production cutback across the nation, would increase our producer pay prices immediately. National Milk Producers Federation should announce this too. It is the co-op’s legal responsibility to profitably market its’ member’s milk, and the stated co-op’s priority “to deliver value” to DFA’s members, has not a profitable pay price. We producers do not want “value”, we want a sustainable producer pay price.
So, as the May $12.18 price comes around, my dairy will not get that price, we have gotten $1.50+ below the class three price for over 4 years, the lowest producer pay prices in the country! You board members have the leverage to change our future, why not adopt a permanent “supply to equal profitable demand” policy tomorrow? Ask Peter Vitaliano and Jim Mulhern to get this started at NMPF too. Thank you.
NDPO Board Member
Reference: Article by Peter Vitaliano
I had a dairy farmer recently tell me, “We make food, people have to eat, how bad can it get?”
NOW WE KNOW HOW BAD IT CAN GET.
People DON’T have to eat ALL that we make.
When the milk supply we make exceeds demand, people will pay only what they have to in order to get the milk they want to eat.
If there is so much milk made exceeding demand, we now know people won’t pay much, if anything, to get the milk they want.
We now know, as we’ve known for decades, that when dairy farmers make an oversupply of milk, dairy farmers go broke.
DAIRY FARMER: Join and implement the co-op management policies of NDPO, share in balancing the milk supply with profitable demand and receive a profitable milk price from the people who have to eat.
NDPO Board Member