A couple of weeks ago, the Dairy Farmers of America co-op announced that they are closing one of their last plants in Missouri. “The plant is losing money,” said a DFA Director, speaking of the Monett plant. “There’s not enough milk to run a full volume. Corn is the culprit. Dairy farmers can’t pay the feed bills.”
“But, hey!” I hear you saying, “Farm co-ops are supposed to work for the producers that own them.”
Well, yeah, that’s true, I answer, but after a few years, farmers stop running their farm co-ops and turn the business over to managers. And, the managers find ways to make more money … by cutting costs … cutting out the farmers.
Then they find someone to blame. Livestock farmers blame grain farmers and grain farmers blame livestock farmers. Putting a finer point on it, the director continued, “We lost 182 dairies in Missouri in 2012 ... and a lot more in the first months of 2013. Well over half of the milk processed in Monett is brought in here from outside of the area. Corn got so high farmers have ploughed under their alfalfa to plant corn.”
He might have added that farmers have ploughed under their pastures, pulled up trees and filled in ponds to plant corn. The subsidies on ethanol have made corn the ultimate cash crop here in the Midwest.
For decades, the corn farmer wasn’t paid enough to cover costs of planting and raising a crop. Those were the days when corn prices hovered around $4. By putting the corn into a “value-added” product, livestock, the farmer could make extra, and keeping production high and price low was an excellent strategy for industry. With low corn prices, industry could buy the commodity cheaply to use in corn flakes, corn sweeteners, animal feed and other products. They had plenty of room to tack on a high price for processing and packaging.
When it comes to milk prices, the problem is similar. Keeping prices down helped industry but squeezed the farmers. For years, dairy men have tried to get our attention. The Missouri Dairy Association says that dairy producers should receive $38 per hundredweight of milk. That would be costs plus a little profit. It would keep them in business. Instead, the price for milk stays stubbornly under $20 and dairy producers charge feed on their visa cards.
For corn producers, ethanol was corn’s new end-product. To promote ethanol, the corn industry forced bills through the legislatures of corn states requiring ethanol to be added to gasoline before it’s sold. The rhetoric was designed to make you think that the ethanol will solve America’s oil addiction, but there was always serious doubt. It costs as much, fuel-wise, to plant and transport the crop, process and distribute it, as we gain.
Due to competition between livestock and ethanol, the corn price is around $8 a bushel. No wonder it’s been so popular, but, again there’s a catch. With corn prices so high, the livestock farmers can’t afford to keep their animals. Higher meat prices, milk prices, egg prices, cheese and other dairy products should be the result of the climbing grain market. But some of those prices, like milk and cheese, are set by the industry, as part of a consumer protection package. When I ask dairy men how the prices are set, they just shake their heads. Ancient secrets. The best explanation is that there’s about a half hour of trading each week, dominated by two or three bidders like Kraft, and that sets the price.
But everyone agrees that we need a dairy industry, so how can we allow dairy farmers to be squeezed this way? The answer is that American processors have a secret ingredient. A three-letter secret ingredient: MPC. Milk Protein Concentrate.
MPCs are powdered residuals of milk with the nutrition squeezed out. It’s more easily shipped and handled than the sloppy liquid stuff. MPCs are allowed as milk substitutes in many dairy products, from American cheese to powdered cheese flavorings to baby formula to yogurt. They’re also a main ingredient in Elmer’s glue.
After the DFA plant stops receiving milk from cows, a handful of employees will remain. Their jobs? Handling “barrel cheese,” a product made from a variety of ingredients perhaps including a modicum of milk and fillers like MPCs.
So, consumers, we’re losing our dairy farms. If we want to keep them in business, we have to remove our purchase power from the industry and give it to the independent businesses.
The only way to be sure your farmers are making ends meet is to find someone with a business of raising cattle and bottling the milk themselves. Here in mid-Missouri, we have three family milk plants and one large one that buys from the area. I know where my milk comes from because I ask them. I call the numbers on the milk bottles (that’s right! I can get milk in glass bottles!) and I talk to them.
If you don’t know a milk producer, ask around at the closest farmers’ market. Help keep these hardworking farmers in business and milk production in your state!
Margot Ford McMillen farms and teaches English at a college in Fulton, Mo. She blogs at progressivepopulist.blogspot.com. Email: email@example.com.
From The Progressive Populist, April 15, 2013
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