Farmers meet in Waterville for dairy proposals

WATERVILLE – More than 60 dairy farmers and dairy industry leaders gathered Monday night in Waterville to hear the details of a farmer-led, farmer-supported program to help raise milk prices.

Lew Gardner, director of the National Milk Producer Federation, discussed the initiative, Cooperatives Working Together, the goal of which is to reduce the number of milking cows and the amount of milk supply to drive prices up. The initiative includes decreasing overall milk production, buying out milking herds and investing and promoting in large-scale increases in dairy exports.

“This is an exciting opportunity,” said Walter Fletcher, a dairy farmer from Pittsfield. “I think we should grab it and run. It’s a self-help program, farmers solving their own problems.”

Although there is no oversupply of milk in Maine – production here decreased by 3 percent during the last 3 years – the western states have dramatically increased production during the same period, causing prices to plummet.

“We’ve had low prices before,” said Gardner, “but they would rebound within a month or two. This time, they have remained consistently low.” In Maine, farmers get about $8 per hundredweight less for their milk than it costs them to produce.

“If we do nothing, the prices will go up and that is because there will be a lot fewer farmers in this room,” Gardner said.

Maine Agriculture Commissioner Robert Spear attended the meeting and said, “This supply-management concept will play an important part in what we do in this state.”

But Spear also noted that Maine has a milk shortage and without enough milk, processors will leave. “This is an industry we want to grow, not shrink,” Spear said.

The CWT program would begin in July. Meanwhile, efforts to reauthorize the Northeast Dairy Compact continue. Bills have been proposed in Congress to restrict milk protein concentrate imports, and work is underway for a more favorable WTO agreement involving dairy products.

Of the five milking regions in the country, the Northeast would only have to reduce production by one-half of one percent, said Gardner, which translates to 12.5 million pounds of milk less each month from New England farms. Out west, the farmers must decrease their supply by 12 percent, or 220 million pounds per month.

Gardner explained that in New England, based on an average farm size of 76 cows, 95 herds would be purchased and 97 herds would decrease production by at least 15 percent.

The $60 million program would be funded through a pool created by farmers in cooperatives, as well as independents, that would pay 18 cents per hundredweight of milk.

On an average size farm, that 18 cents would amount to an annual investment of $2,500, said Gardner, but each farmer would see an increase in milk prices that would provide a $17,800 return.

Although Gardner said the program is planned to run for 12 months, the structure will remain in place to be activated should a crisis reoccur.

“There is room in this program for farmers with 20 cows or farmers with 15,000 cows,” said Gardner. “But this industry must do for itself. Look at the chicken and hog industries. There are no small farms left.”

Cooperatives that have already voted to participate include DairyLea, Land O’ Lakes, Dairy Farmers of America, Agri-Mark, St. Albans’ Cooperative and many other smaller cooperatives.

NMPF will hold a second informational meeting tonight at 7:30 p.m. at the Holiday Inn on Main Street in Bangor.