Learning From HistoryJerry Kozak,
President/CEO During the last few weeks of 2009, a variety of media outlets have created reviews and retrospectives of the past decade: the highs, the lows, the big news stories, and what’s changed in our lives since the 21st century started. I thought it would be a useful exercise as this new decade dawns to do something similar, using the archives of this monthly column. What’s ironic is that the first three CEO Corner columns I wrote in the year 2000 all dealt head-on with issues that are just as timely today – and arguably even more so – as they were 10 years ago. (I have posted all three of them in the column archives for your reference). My January 2000 CEO’s Corner discussed the revisions of the Federal Milk Marketing Order program that were implemented effective that month, the most significant changes to milk pricing in years. It advocated making necessary changes to the program without dumping the Federal Order system entirely. The February 2000 column talked about the need for farmers to build a consensus behind a shared series of political goals, in preparation for the 2001 Farm Bill. That column was the harbinger of the Dairy Producer Conclave process that NMPF used in 2000 to bring producers and various national farm organizations together to discuss a laundry list of shared policy concerns, with an eye toward building a platform of shared objectives. And the March 2000 column reviewed the importance of the dairy price support program, and why it was needed, even thought it offered an imperfect safety net. It contained this prescient quote: “there’s very little the government, or cooperatives, or even individual producers, can do to completely insulate farmers from the whims of the marketplace.” Jump forward 10 years, and all three of these themes are again front-and-center concerns for dairy farmers. It’s not a coincidence that each of them is reflected in the long-term strategic planning process on which NMPF spent considerable resources in 2009. This planning process has produced a roadmap to far-reaching changes in the economic regulation of milk prices, a blueprint we call “Foundation for the Future.” Specifically, it calls for significant changes to the Federal Order system, but not scuttling it entirely. The amendments to the system that were implemented ten years ago also created a rolling wave of further tweaks and adjustments in the following years that have left a generally uniform sense of dissatisfaction with key elements of the system. After this past decade, when the glass has often appeared half-empty, it’s time to again pursue major reforms. With regard to the price support program, it remains an important if flawed backstop for farm-level prices. But our Foundation for the Future blueprint asks that same bottom-line question raised by the quote from March 2000: namely, if the support program can’t insulate farmers from price volatility, shouldn’t we then pursue a better option? More to the point, should the government resources spent on buying products under the price support program be used to help indemnify against not just low prices, but also negative profit margins? As the decade of the aughts (or nots, or however you want to label the past ten years) has demonstrated, milk prices are only half the profitability battle; the other half is input costs, and those have shifted higher, likely for good, as the decade ended. So we need to address that dynamic in the new decade with a better type of safety net. Lastly, my Feb. 2000 column noted that as dairy farm numbers shrank between 1990 and 2000, the need grew to forge a consensus among those still farming. The same is even more true in 2010 as it was ten years earlier. We need to rally around a shared platform of goals and objectives, if we are to have any hope of making constructive changes in the future. History is always a good teacher, and sometimes, the only one. Regardless of whether a new decade truly brings new attitudes, it’s now time we build on the history of the past ten years to again address these old, familiar challenges. *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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Tony Veiga:
this free system of producing as much milk as you endeavor has got to quit! We need a system that will control over supply and bring demand into place. a system that will allow growth and sustainability for the Dairy Industry. A system that work's for Dairymen and co-op's. At some point responsibility needs to be addressed! thanks Tony Veiga sunnyside, wa.
Mike Sumners: