By Jane Burns
Wisconsin State Journal, June 26th, 2010
For all the complex issues raised at Friday's workshop on competition in
the dairy industry, the question at the heart of it was a simple one: What
is happening?
That's how U.S. Sen. Russ Feingold, D-Wis., broke it down to a crowd of
about 600 at Union Theater on the UW-Madison campus. The event drew
farmers, producers, lobbyists, politicians and economists to discuss a
dairy industry that has seen rising production costs and massive milk price
fluctuations in recent years.
"Farmers were losing $100 per cow per month while consumers were not seeing
a drop in price," Feingold said. "Some in the middle of the supply chain
were posting record profits. Something is amiss."
The workshop was hosted by U.S. Department of Justice and the U.S.
Department of Agriculture. Facilitating much of the morning discussion was
U.S. Agriculture Secretary Tom Vilsack, with Christine Varney, assistant
attorney general for the Justice Department's Antitrust Division. U.S.
Attorney General Eric Holder was scheduled to participate but was attending
a funeral.
With the dairy industry contributing $26 billion to the Wisconsin economy,
the state was well-represented in an opening roundtable discussion that
featured Feingold, U.S. Sen. Herb Kohl, Gov. , Rep. Tammy Baldwin and state
Agriculture Secretary Rod Nilsestuen.
"There is no hidden agenda," Vilsack said. "This is to help rebuild and
repopulate rural economies and rural populations."
It's the third of five sessions to address competitive challenges in the
agriculture industry.
Friday's session centered on dairy issues — from wildly fluctuating milk
prices, to proposed regulation of cooperatives to antitrust issues
regarding large producers such as Dean Foods and the impact of large
retailers such as Walmart or Kroger.
"It's difficult to target a single culprit in this," Feingold said. "It's
not about assessing blame. It's educating the agencies to get an answer."
Despite the stated point of avoiding blame, many in attendance and on
panels didn't mask their contempt for the system of milk pricing. The
Chicago Mercantile Exchange sets the block cheese price, which determines
milk prices.
The CME was criticized for being thinly traded and volatile to market
fluctuations.
"It went from fairly stable ups and downs to looking like a heart monitor,"
said Joel Greeno, a Kendall farmer who milks 48 cows on 160 acres. "It
can't look like a heart attack."
Kohl agreed. He called for an investigation of how the exchange worked.
The workshops would prove valuable, "if we can ensure CME is operating
effectively in producing a national market for us," Kohl said. "I don't
think there's a producer in the country who thinks that it's working for
them."
Other debates within the workshop centered around what the government can
and should do. Vilsack said the listening sessions would help gauge whether
new regulations are necessary or if stronger enforcement of current
antitrust regulations would be sufficient.
Vilsack and Varney said the workshop was not about potential changes to the
Capper-Volstead Act, the antitrust law that has an exemption for
cooperatives. During a public comment session, many farmers from throughout
the U.S. spoke in support of their co-ops, primarily representing Dairy
Farmers of America, the nation's largest.
In the past, Vilsack said, there wasn't a consistent message from farmers
about what the problems were. Issues would vary depending on region or the
size of the farms but not anymore.
"This is an industry that is hurting, producers large and small are
hurting," he said. "Crisis has moved this to consensus."
