Wertish, Paul call dairy hearings encouraging for agriculture
By Janet Kubat Willette
jkubat@agrinews.com
Date Modified: 07/15/2010 4:06 PM
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Two Minnesotans who attended the June 25 Department of Justice hearing in Wisconsin are encouraged by the hearings.
Gary Wertish, Minnesota Farmers Union vice president, and Gene Paul, who coordinates legislative work with NFO, both attended the meeting. Neither was able to speak, but both had the opportunity to listen and learn.
Paul, of Delavan, has been to all three of the joint hearings held by the Department of Justice and the Department of Agriculture and he will attend the remaining two as well.
"This is one of the best things that's happened in the many years I've been around," Paul said. "I've really been encouraged by it."
Wertish, of Renville, said the events are the first-ever joint hearings between the Justice Department and USDA. That shows the level of importance the administration places on the issues affecting agriculture, he said. It's particularly important that the agencies work together because they share enforcement duties on issues important to agriculture.
The issues impacting the dairy industry, the topic of the June 25 hearing in Wisconsin, are complex, Wertish said. Supply, demand and imports must all be considered. Unregulated imports, including milk protein concentrate, depress prices, he said.
Wertish has a number of unanswered questions: Are retail outlets, who have become increasingly consolidated, dictating prices throughout the chain? Are cooperatives stuck in the middle? Does a farmer have a chance to earn a fair return for milk if there is only one company to sell milk to?
Wertish said California Farmers Union member Joaquin Contente, of Hanford, said farmers were paid as little as $9 per hundredweight over the last year while consumers paid $35 to $50 per hundredweight.
Money is being made, it's just not coming back to the farmer, he said.
Contente was a panelist at the hearing. Farmers with herd sizes ranging from 48 to 14,000, agreed there is a problem of low prices at the farm gate and that something needs to be done. The continued push to increase efficiency hasn't worked, Wertish said. However, the low price problem won't be easy to solve, he said.
The Midwest is fortunate to have a number of farmer-owned cooperatives, but the price they pay is impacted by the 1 percent of cheese volume traded on the Chicago Mercantile Exchange, Wertish said. That 1 percent determines the price of milk and cheese in the Midwest, he said.
The CME is thinly traded, Paul said. The same people are buyers and sellers. The Department of Justice really needs to look into it. Farmers need an open, competitive market, he said.
The second big issue that day was the tremendous amount of concentration among fluid milk handlers, Paul said. There aren't many choices out there anymore. That level of processing is highly concentrated and farmers don't have a competitive market, he said.
Farmers are at-risk from increasing consolidation, not only when selling their commodity but also when buying their inputs, Wertish said. Agriculture, and particularly the dairy industry, provide huge economic benefits for the state.
"We can't keep losing farms and expect rural communities not to suffer," he said.