Eighty-five Indiana dairy farms will be affected by a termination letter sent this week from their milk marketing provider, Dairy Marketing Services. The reason is too much milk and not enough demand, which is squeezing prices for milk and the marketing organization. Heather McCann, Communications Manager with Dairy Farmers of America, says Indiana is in the Northeast Area served by DMS, where supplies are most plentiful.
“We’re not seeing a commensurate increase in demand to take up that milk, and so all of that excess milk results in increased balancing costs, increased transportation costs, and because there’s a whole lot of extra milk out there, that milk is available pretty cheaply,” she explained. “So, the premiums available to help pay producers are also reduced.”
For both independent dairies and cooperative members, she says there is no practical method available under Federal Order regulations for the sharing of marketing costs and revenue fairly and equitably among all producers in the marketplace. That’s where DMS has been able to serve the industry, creating efficiencies along with reductions in the cost for milk assembly, field services and transportation.
McCann says Dairy Farmers of America is now reaching out with assistance to Dairy Marketing Services members.
“We are going to offer membership to those DMS producers into DFA. If they would like to come in we’re offering two special accommodations in that they can choose to pay equity or not pay equity in that first twelve months of membership, and also in the first twelve months we’re willing to let them out with 30 days written notice if they find another market that they would prefer to go to in that window.”
The letter from DMS explains that within a few days a six-month notice of termination will be sent to those affected, during which time producers are encouraged to find another milk market in the Mideast Area.
Dairy Industry Launches Marketing Campaign
The dairy industry has launched a multi-year marketing campaign promoting more than just milk. The Innovation Center for U.S. Dairy, in partnership with America’s Dairy Farm Families and Importers, has launched “Undeniably Dairy,” showcasing the “undeniable taste and enjoyment” that comes from dairy products. A marketing executive at Dairy Management Inc. said in a statement that the campaign “is about reestablishing the connection between the enjoyment of the product and the hard work and pride of the people who make it possible.” A preview of the campaign video along with other content can be found at www.undeniablydairy.org.
Roberts, Stabenow, Pressing USDA on Canada Dairy Policy
Senate Agriculture Committee leaders want the Department of Agriculture to address a dairy pricing issue between the U.S. and Canada. Senators Pat Roberts and Debbie Stabenow are pressing USDA and the U.S. Trade Representative’s office to provide continued engagement with Canada over its dairy pricing policies that are harmful to U.S. dairy producers. In a letter to Agriculture Secretary Sonny Perdue and U.S. Trade Representative Robert Lighthizer, the Senators say: “The potential for further and greater injury to U.S. producers will only continue to grow if this scheme remains in place.” The Senators also asked USDA and the USTR office to evaluate all tools available to mitigate any damaging effect from the pricing scheme being implemented by Canada.