Finding Holiday BlessingsJerry Kozak,
President/CEO The arrival, and passage, of Thanksgiving heralds the start of the holiday season – which apart from a busy time for dairy marketers, also offers an opportunity to reflect back on the developments the past year. And what a challenging year it’s been.
Just as larger economic forces have created the worst recession in 75 years, the dairy recession itself is the worst in modern history. The insult of low prices was paired with the added injury of higher input costs, creating negative margins with little precedent. Many sectors of U.S. society have been harmed by the Great Recession of 2009, but few damaged more so than the dairy producer community. Yet, most farmers are still standing, and are looking at strengthening prices as the year ends. Most of the farms still in business are here because of generous lenders who have allowed their clients to burn through extraordinary amounts of equity to keep the farm. It will take years of above-average prices and positive profit margins in order to make up the lost ground from 2009, just as it will likely take years before the major stock markets will return to pre-recession levels. We can see the end of the tunnel, but we’re not yet through it. But for those still in the business, which is the vast majority of farms, it’s worth giving thanks for the things that have made survival possible in 2009. These include a leadership team at the U.S. Department of Agriculture, and Congress, that has used a variety of resources to help improve farm-level prices. Above all, they have listened to what NMPF suggested as policy actions, and then they acted. It includes the members of Cooperatives Working Together, who earlier this year enlisted in a two-year membership arrangement to allow us the ability to aggressively remove surplus milk production. In the first ten months of the year, the U.S. dairy cow herd shrank by 236,000 – and in that span of time, CWT removed approximately 225,000 cows. History will show that this program was instrumental in helping to align supply and demand and hasten a recovery in farm-level milk prices. The similarity between those two numbers is unmistakable. A sense of gratitude is also due everyone in the producer community who has contributed their ideas about how to use this crisis as a springboard to make positive and needed changes in our milk pricing system. For the long haul, we need to use the painful memories of 2009 as the means to improve the future. NMPF is making good progress in that area with our strategic planning process, and its outline for systematic reform we call Foundations for the Future. We’d like changes to come in the areas of the safety nets for farmers, the Federal Milk Marketing Order system, and in CWT itself. As valuable as each component has been this year, the status quo is not sustainable for the future. Even the most unshakable optimist – which is what you have to be if you’re involved in agriculture – may have been disheartened by the dairy crisis this year. For virtually every farmer, it must have been hard to find solace on those days when after hours of hard work, you’re poorer in the evening than when your day started before sun-up. A bounty of milk production ironically has made for a shortage of monetary reward in 2009. But next year will be different, and better, and if for no other reason, a better 2010 should be justification enough to give thanks, and count a few blessings. *Anyone is welcome to post comments. Comments must be approved before appearing on the page. All effort will be made to publish every comment, provided that each comment is respectful and directly addresses the issues discussed in the column. Readers are encouraged to respond to the comments of others. Comments |
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BERNARD KWAKU:
Maryjane Schambach:
Ken Miller: