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Minnesota Milk president outlines state of state's dairy industry

By Janet Kubat Willette

Date Modified: 02/13/2013 7:51 AM

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ST. PAUL – Minnesota Milk started Dairy Day 2013 with an 8:15 a.m. committee appearance.

Minnesota Milk president Pat Lunemann presented Minnesota's dairy industry statistics to the House Agriculture Policy Committee.

Minnesota milk production is up 2 percent from 2011 to 2012 and production per cow is up 2.7 percent year over year. The number of cows was steady at 465,000. The number of dairy farmers dropped to 3,900.

Each cow is worth $25,000 in economic activity, Lunemann said.

Nationwide, more than 13 percent of dairy products are exported and Minnesota's share of that was $218 million in 2012, he said.

Last year was difficult for dairy farmers because of high feed costs and thin margins. Milk prices peaked in October and November and are coming down. Minnesota dairy farmers are fortunate in that most grow all or a significant portion of their own feed and the state came through the drought of 2012 in better shape than other states.

Lunemann asked legislators to streamline the permitting process and make it more efficient. Small and medium-sized producers are most intimidated by the process, he said. Larger producers may have staff in place to do permitting.

Farmers are tremendous stewards of the land and have made strides in how they care for the environment.

"Manure is a resource too valuable to waste," he said.

He spoke of Discovery Farms, which funds on-farm, in-field research to generate data that farmers and policymakers alike can use in decision making and of the Livestock Investment Grant. The grant, which the Minnesota Department of Agriculture oversees, provides funding to encourage reinvestment in Minnesota agriculture. The grant is funded at $1 million a year. There were $6.7 million in grant requests for the $1 million available in the most recent round of applications. The grant requests represented $86 million in investment in agricultural facilities.

Lunemann asked legislators to consider the impact of legislative tax reform on reinvestment in agriculture and to compare Minnesota tax rates to neighboring states.

He also asked for support of a dairy research, teaching and consumer education facility. A group has been brought together to study the issue and it's hoped they will report back later this year and have a proposal ready for the 2014 bonding bill.

The dairy research, teaching and consumer education facility was also discussed when dairy farmers met with Gov. Mark Dayton and Agriculture Commissioner Dave Frederickson in the Governor's Reception Room.

Lunemann told the governor about the project and said a task force has been set up to study the issue. He's hoping the group can start meeting soon so they can bring a proposal back for possible inclusion in the 2014 bonding bill.

"What's the hang up?" Dayton asked.

Frederickson explained there was some question as to who was supposed to convene the group and he said he'd assume that responsibility.

The governor said he'd support a dairy research, education and teaching facility.

He shared a couple personal stories with the group, telling them that dairy farmers have the strongest grips of anybody he meets. His grandfather was a dairy farmer who sold his milk to Dayton's department store. He told of his father grooming his own work ethic, assigning him the chore of weeding the horse pasture when he was 8 years old. The only thing worst than a bum was a rich bum, his father told him.

The dairy farmers thanked Dayton for his help in streamlining the permitting process and asked him to help them figure out the fate of the 40 Square Cooperative Solutions. The health care cooperative was created to provide health care benefits to Minnesota farm families. The application was first submitted in 2010 and the cooperative has been stuck in regulatory limbo since Oct. 24.

"What we need is an answer, yes or no," Lunemann said.

The governor said he'd call the commerce commissioner and see what he could do.