Iowa Holstein board endorses Dairy Price Stabilization Program
By Jean Caspers-Simmet
simmet@agrinews.com
Date Modified: 03/11/2010 9:10 AM
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CEDAR FALLS, Iowa —The Iowa Holstein Association board of directors endorsed Holstein Association USA's Dairy Price Stabilization Program during last week's state convention in Cedar Falls.
Members heard a presentation on the program from Lucas Sjostrom, government relations specialist and communications assistant with Holstein Association USA. A straw poll after Sjostrom's talk showed strong support, said Mark Kerndt, a Waukon dairy farmer and president of the Iowa Holstein Association.
"We want something that will work better than what we have now," Kerndt said. "We have such wild swings in our milk prices. If we have an opportunity to improve the situation then it's something we need to look at."
Holstein Association members also heard a presentation from Delhi dairy farmer Larry Shover on Dairy Farmers of America's Dairy Growth Management Initiative.
An objective of the Dairy Price Stabilization Program is to reduce price volatility to producers, processors and end users, said Sjostrom.
The DPSP was formed by the Holstein Association USA board of directors when they saw that no action was being taken during the milk price crisis in early 2009, Sjostrom said. People and organizations from around the country endorse the concept.
The program would be national and mandatory with every dairy operating under the same rules. The decision about whether to grow or not would continue to rest with individual dairy producers, Sjostrom said.
The program would operate on a producer-by-producer basis and milk production would be measured against the same quarter in the prior year. Farmers would pay a market access fee on any new milk produced.
Fees from dairies producing beyond their allowed limit would be collected and redistributed back toe producers who held their production at or below the allowable annual growth, Sjostrom said.
The program will cost dairy producers less than 2 cents per hundredweight to administer. For the typical U.S. taxpayer, it won't cost a penny, Sjostrom said.
"If we don't do something positive now, our future will look a lot like our friends in the poultry and pork industries, and that's not a scenario we want to delve into," Sjostrom said.
Shover described DFA's Dairy Growth Management Initiative as a producer-funded, producer-governed program that would allow for growth in the industry while providing a variety of mechanisms to quickly adapt to changing market forces to stabilize milk prices. The proposal requires legislative support and mandatory participation. Funding would come from a mandatory assessment on all farmers.
Shover said DFA and Holstein USA are talking, and he thinks they will come together on one program.
Sjostrom urged producers to call their cooperatives and congressional delegations and tell them that "we need to look for a better solution."