The Holstein Association USA dairy plan
August 24, 2009 by Bob Meyer
Filed under Dairy, News, Top Stories
There are a number of proposals being put forth these days as to how to deal with the current dairy crisis and what can be done to prevent it from happening again. Holstein Association USA is proposing a supply management plan which establishes a milk production base and a market access fee for any amount of milk produced above that base. Lucas Sjostrom says this is not a quota system, “Our goal is to give producers an incentive to pay attention to national supply and demand and therefore pay attention to the milk produced on their farm in relation to supply and demand.”
The plan is to create a national producer board, that body would establish what the national demand is then divide that demand up among current producers. The board would establish a production amount for a particular dairy farm for the year. If the producer goes above that amount, there would be a market access fee assessed on all of the milk produced. “We want it to be a big enough penalty, a big enough deduction that people would have to pay attention to it and only expand big on purpose.” So producers can expand but they have to take into account the access fee when figuring whether the expansion is economically feasible. A producer’s base will be the past 12 months of production so the increase will eventually become part of the base.
For producers without a 12-month production history, their base will begin with the first full quarter of milk marketings and for the next three quarters. The base is assigned to the producer owning the producer license for the dairy operation. Bases can be transferred o someone who takes over the dairy operation on an existing facility. Producers can also combine bases from two or more facilities but the producers must remain engaged in milk production in the combined facility.
The National Milk Producers Federation Strategic Planning Task Force is studying the plan. Sjostrom says there are a number of details to be worked out but the industry has to start somewhere and this is as good of a place to start as any.
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It looks to me like you are wanting to control production. Let the market control the production, it has done a good job in the past. You don’t have to bail people out if it goes bad. We weren’t promised anything we get in, that is free interprize. The Government is not helping things by trying to bail out stupid decisions, so there is no reason for you to try to control people either.