Farm group asks co-ops to unite to get better milk prices
The National Farmers Organization is asking all the major national milk marketing cooperatives to come together and use their market share as power in setting a fair price for the nation's milk producers.
At a time when milk prices are at disastrously low levels, Brad Rach, head of NFO's national dairy department, is asking the co-ops to join together as one major bargaining unit to extract better prices from the processing industry.
The major cooperatives handle about 80 percent of the nation's milk. No single buyer has that much market share. Rach feels this gives the sellers of milk huge bargaining power, if used properly.
Rach announced the program as guest speaker at the Minnesota National Farmers Organization convention at the Lynx Golf Course near Sauk Centre.
He added that NFO has long supported Cooperatives Working Together (CWT), an effort to reduce the supply of milk nationwide, and now he proposes his new program, Cooperative Marketing Initiative (CMI).
The program would set national production levels consistent with national usage and each cooperative would be assigned a production base level consistent with their share of the national production.
CMI would then set target prices at levels that would enable members to profitably produce milk. The proposal has been submitted to the major cooperatives and is being considered.
In other business, Bob Hendrickson, who markets and bargains for NFO cattle producers in Minnesota, said that until recently it was hard to get a good price from packers until late Friday afternoons, when packers suddenly find themselves hurting for supply for the following week. Now that problem has eased somewhat because packers' schedules have changed.
He recommends to all cattle producing members to "take protection" by forward selling as much as possible because for the past 14 months cash prices have not caught up to forward contracting prices.
"How do we make bargaining really work?" he asked. "We move the product around," he said, meaning taking supply away from one packer and selling to another. "We know we are doing the right thing, and many farmers want what we have, but we just haven't seen them yet."
Terry Nelson, the new head of the organization's grain department, told the group that more duties are being assigned to fewer people in the department to make it more profitable.
He added that many organic grain farmers are holding grain that may not be the best quality because of this fall's weather. He said NFO can work with these producers in finding markets. The organization has many markets available.
The state organization elected a new trustee, Don Koep of Clitheral, replacing Jim Kenyon of Madison Lake, whose term expired. Other state officers are elected at the State Board reorganization meeting in January.
Minnesota NFO capped off the convention with a silent pie auction, with $250 in proceeds going to the Sauk Centre Food Shelf.
The organization's leaders exchanged ideas with two officers of the Minnesota Future Farmers of America. The guests were Emily Achen of Sauk Centre, the state secretary; and Mike Sheely, of Adams, the state FFA sentinel.