By Kirk Carapezza
WI Public Radio - Monday, June 28, 2010
Dairy industry cooperatives could soon face increased scrutiny
from the federal government, which is weighing whether to regulate such
operations. Advocates say it would aim to prevent independent farmers from
being driven out of business by increasingly large co-ops.
At a hearing last week, several independent dairy farmers, including Jim
Goodman, called on the USDA and U.S. Department of Justice to investigate
the increasing consolidation of farms before it drives them out of
business.
"When you're getting more money just because you're big, that's not
operating for the mutual benefit for all members," said Goodman.
Goodman runs a 45-cow organic farm in Wonewoc. He says rapid consolidation
in recent years has come at the cost of small farmers and their
communities.
But some coop supporters argue they could actually fix a broken pricing
system. Peter Kappelman operates a 440-cow dairy farm in Manitowoc County.
He's also chairman of the Land O' Lakes board, and says coops -- no matter
their size -- help farmers to effectively bargain with mega-retailers.
“I've been told that Land O' Lakes is big,” says Kappelman. “One of the
customers we deal with is called Walmart. They are approximately 100 times
bigger than we are. We do not feel the power of big, as they negotiate to
bring down the price of food and we are wrangling the best price we can for
our members products.”
The USDA has reported dairy market sales fell more than 30 percent last
year, and though production cost steadied, the checks farmers got for milk
were nearly cut in half -- from $21.00 per hundred pounds to $11.00.
Regulation of co-ops were just one of several topics debated among farmers
and industry experts during a public hearing last week on the UW-Madison
Campus. The event was sponsored by the U.S. Department of Justice and the
U.S. Department of Agriculture.
