No Man's Land

Wisconsin Associations Share Ideas For Future

Volume 135, No. 23 Friday,December 3, 2010

On a cold, clear Christmas morning in 1914, British and German troops emerged from muddy trenches along the notorious Western Front to meet, exchange gifts and share a game or a joke. Now dubbed the
Christmas Truce, the spontaneous show of fellowship among thousands of front line troops that day remains a symbol of hope and inspiration for all.

On December 8, 2010, a Christmas Holiday dinner and joint meeting will bring together cheese industry leaders representing Wisconsin Cheese Makers Association and dairy producer directors of the Wisconsin Dairy Business Association for the first time.

That tongue-in-cheek comparison highlights an important evolution in the dairy industry.

Dairy challenges and concerns once divided neatly into producer or processor silos.

But today, dairy producer and processor groups are increasingly engaged in dialogue on dairy policy, dairy exports, food safety and tight government budgets.

It’s a necessary evolution and a sign of the times, a result of business and cooperative consolidation, farm concentration, volatile prices and aging government policies and programs.

Dairy industry partisans are leav ing their trenches to meet in No Man’s Land and face matters that
affect producer and processor alike.

EU Exports
At the national level, the emergence of dairy exports has created opportunities and challenges. In the past year, the European Union announced that export certification requirements will apply to milk from individual US farms.

The new 400,000 somatic cell count ceiling for milk used in export entwines dairy producers and their exporting processors in a shared goal and imminent deadline. Dialogue has already begun, and processor quality premiums provide an incentive to bring producer milk into global compliance.

Raw Milk
Producer and processor interests converge at the controversial issue of selling raw milk as a consumer beverage. Wisconsin dairy processors and producers joined forces in early 2010 to oppose a state bill to allow on-farm sale of raw milk.

While a vocal minority of dairy producers pushed for the right to sell their unpasteurized milk to consumers, a broad coalition of producers joined the entire processor community in defending the safety and wholesomeness of dairy products. In a victory for this united front, Wisconsin Governor Jim Doyle vetoed the bill.

Producer Security
Compromise between dairy producers and processors in Wisconsin has built a practical producer security program, including a fund pool designed to compensate producers if a milk buyer defaults on payment. Processors build the fund through fees, and producers have accepted reasonable caps including a payout level of 80 percent on losses and a limit on the overall size of the fund pool.

Phosphorus Trading
A unique dialogue between producer and processor has opened in Wisconsin as the state’s Department of Natural Resources begins to enforce new limits on phosphorus discharge on farmland and into state waterways (rivers, streams and lakes). Wisconsin has (unfortunately) moved ahead of other dairy states on tight limits on phosphorus in dairy plant waste streams.

The new phosphorus regulations include the concept of trading phosphorus credits between dairy producers and dairy plants in the same watershed. The unprecedented (and complex) idea would create legal contracts between farm and plant, with plants paying for and gaining a credit for reduced phosphorus use on-farm.

Details of this miniature version of cap-and-trade and being hashed out by producers and processors in an advisory committee to DNR.

Budget Cuts
In Wisconsin and other states, producer and processor groups are discussing the impact of government budget cuts on regulatory programs, farm assistance programs and business development funds.

This spring, Wisconsin will begin earnest debate on a new two-year budget that must close a projected $2 billion state deficit. Together, dairy producer and processor groups will assess which programs may need cutting and which should be defended.

Farm Bill
Federal dairy policy debates have come closest to the trench warfare metaphor above and this column doesn’t anticipate easy compromise for the upcoming farm bill.

Yet dialogue between national producer and processor organizations has been frank and thorough so far. A shared concern over the volatility of milk prices, and the failure of today’s federal “safety net” programs has both sides exploring new ideas.

Tension between dairy producers and processors is a natural part of a free market economy. But for a growing number of issues that include access to markets, the right to grow businesses and need to defend the wholesomeness of dairy foods, producers and processors are cooperating like never before. r

John Umhoefer has served as executive director of the Wisconsin Cheese Makers Association since 1992. You can phone John at (608) 828-4550; Fax him at (608) 828-4551; or e-mail John Umhoefer at jumhoefer@wischeesemakersassn. org


Other John Umhoefer Columns

 Dairy & Wisconsin’s New Leadership
Wisconsin Cheese Is Investing, Expanding
 Talking Competition
 Being Big Dairy
Upper Midwest Prospects in 2010
Upper Midwest Growth: Perspectives From The Farm
Blue Skies or Bust
Pushing Back Against A Tough 2009
Support Demand, Not Price
Dairy: A Good Bet in a Bad Economy
Wisconsin's Future: Growth
Keeping Sustainability Real
Nose Dive
Dairy Dives into 2009
Consider This...
 Fulls Vats
Implement Make Allowances ASAP
Security Reforms
Spring Forward
A Week of Clarity

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