Opinions & Sacred Cows: A lot of talk, not much action…

by Ron Goble

“When producers are losing their equity at record rates, and profitable processors go on with business as usual, something is very wrong with that picture.”

Agriculture Secretary Tom Vilsack took his “Rural Tour” to California’s Central San Joaquin Valley late last month and fielded a few questions from a room full of dairy producers and farmers, but provided little assurance that anything would change in the near future.

Producers, many dressed in red to signify the red ink they are bleeding, were asking Vilsack and Congressman Dennis Cardoza (D-Merced) for “action now.” Linda Lopes of Turlock, president of California Dairy Women’s Association, said that while they appreciated the government raising the support price for milk, “we need the support price to be much higher, in place longer, and we need it floored. Right now, all of us are surviving on our equity and unless we have help for a longer period of time, the next time (crisis strikes) there won’t be any equity to borrow against.”

Vilsack said the government is on the tail-end of the fiscal year and wouldn’t have any new funding until after Oct. 1. He tried to assure the crowd that he and Congress would be working to find a long-term solution. I don’t think many in the audience, estimated at nearly 400, believed it would happen.

Gary Genske, a dairyman and principle in the CPA firm Genske, Mulder & Co., handed officials his white paper on supply management and was the first to speak during the “listening session.”

“We are literally, financially suffocating across the country. There is approximately 60,000 dairy farmers losing somewhere around $4 per cow per day, which times 9 million cows is $36 million a day and about $1 billion a month in true operating losses,” declared Genske.

“We don’t see any plan put into place to change that. Our coops tell us that a year from September things will get better. While there are several bills that have been introduced and several growth management plans from the industry that have considerable dairy support, we need help and we need it right away! Dairy producers’ nerves are on the edge…and without a change in the way our milk is priced, within a month there will be hundreds, if not thousands forced out of business. We need a little help from the federal government to get us through this time,” Genske pleaded.

Many of those at the event with real bottom-line questions for Vilsack, were ignored and the vast majority of those called on were in the “VIP” section of hand-picked political supporters of Congressman Cardoza, who served up softball questions that Vilsack could pontificate on. He failed to hit anything out of the ballpark.

Many producers left more frustrated than when they arrived. It was no different from any other political “road show” – emphasis on show. It was a lot of rushing around and commotion – not to mention expense – for nothing.

If the dairy industry has to rely on politicians to save it, we are in deep manure indeed. The bottom line of the bottom line is….processors (coops) continue to do quite well financially through these tough times for dairymen. It is strange that processors are not running in red ink like those who make the product they process and sell. It is time dairy producers and processors develop a system that pays dairymen a fair price for their milk with flexibility to adjust for increases in production costs.

When producers are losing their equity at record rates, and profitable processors go on with business as usual, something is very wrong with that picture.


Have an opinion or response? E-mail Ron Goble, Associate publisher/editor, Western DairyBusiness at: rgoble@dairybusiness.com