CWT Committee Votes to Focus on Exports After 2010
November 5, 2010
CWT Committee Votes to Focus on Exports After 2010
Members of Cooperatives Working Together (CWT), the dairy farmer-funded self-help program, voted last week to focus the seven year-old program exclusively on building export markets after 2010.
At NMPF's Annual Meeting last week in Reno, Nevada, CWT’s management committee determined that an export-centered program was the most appropriate course to follow in the future. This means that CWT will no longer fund any herd retirement rounds, through which CWT member farms are paid to reduce their herds. CWT conducted its 10th and final herd retirement this past summer.
“CWT has undergone several shifts in how it has been operated since it started in 2003,” said Jerry Kozak, President and CEO of NMPF. “The decision to drop the herd retirement program, but to maintain the basic structure of CWT with an exclusive focus on helping sell U.S.-made dairy products in foreign markets, allows CWT to continue making positive contributions to dairy farmers’ bottom lines.”
NMPF’s Board of Directors voted to support a CWT program that will be funded at two cents per hundredweight, starting Jan. 1, 2011, and running through December 2012 (the program currently collects 10 cents/cwt. on its members' milk volume). Members also determined that 75% of the nation’s milk supply must be contributing at that level in order for the program to continue. They also voted to take the remaining funds not allocated so far in 2010, and shift those to the export assistance program in 2011.
A presentation by Dr. Scott Brown of the University of Missouri showed that the Export Assistance program has provided an excellent return on investment. For every one dollar spent assisting CWT member cooperatives in making export sales, U.S. dairy farmers received $15.53 in additional revenue. CWT’s export activity in 2010 has returned 18 cents per hundredweight, according to Brown’s analysis.
In the coming weeks, CWT will be reaching out to all cooperatives and all independent producers in order to achieve the minimum 75% participation level needed to move forward with the collection of the additional two cent investment that will provide total funding of approximately $40 million per year.
Kozak said that the membership commitment will be for 24 months for both cooperatives and individual dairy farmers. This will allow CWT to develop an export assistance strategic plan as to how and when to best utilize the funds committed, he noted.
