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NFO dairy program moving forward

By Carol Stender
cstender@agrinews.com

Date Modified: 12/27/2012 8:39 AM

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SAUK CENTRE, Minn. — Brad Rach is disturbed by trends he's seeing in dairy.

The National NFO dairy specialist noted the changes at a recent Minnesota NFO convention, starting with a list of the top 50 dairy processors published in an October Hoard's Dairymen article.

The top three processors for 2011 were Dean Foods, Sapudo and Nestle, USA compared to 15 years ago when Mid American Dairy, AMPI and Land O' Lakes topped the list. The last three are all cooperatives, while, out of the current top three, two are foreign owned companies.

Rach noted that the top 50 processors in the current list own 518 plants. Dean Foods owns 97 of those. Land O' Lakes, listed fourth, owns nine.

"The dynamics are changing and it bothers me to know that farmers have invested so much in the industry and now the plants are proprietary owned," he said.

Of the top 50 plants listed 15 years ago, 60 percent are no longer there, he said. Those businesses have either merged or closed.

Before federal reforms took place in dairy, it was possible to go in the countryside and create competition, Rach told the NFO members. The M and W series was a base price for manufactured milk in Minnesota and it was competitive.

Now, Rach says there is more volatility in the market.

The Class III price forecast for 2013 is unchanged. That's not good news when talking to farmers who are buying corn and hay in drought areas, he said.

"Government policy continues to press for farm programs that help farmers live with low prices," he said. "We should then expect those low prices."

There is an option, he said.

"I feel the time is right if we, as members, can get our message out," Rach said. "There has probably never been a greater time and greater need for the NFO than there is right now."

Bob Lewis is part of NFO's dairy procurement team. The effort started as a pilot project and is now set up across the nation. Staff is being trained and they are looking at ways to build and expand programs.

It starts with visibility. The National NFO has placed ads in several newspapers across the country. Social media is also being used including a Facebook page, 2farmgirlz. Nikki Studenski, a member of the NFO dairy team, is one of the founders of the site. It was established after World Dairy Expo and started with 300 likes. It now has more than 1,840, she said.

Through the Facebook site, they are working with a young couple in Wisconsin. They've put the couple in contact with Organic Valley and are making connections with a dairy farm that needs to sell its herd due to an illness.

"This is a direct procurement tool to keep them on our trucks," she said.

There was a historical theme threaded throughout the convention. The early December convention marked its 50th year. Paul Arndt, who has served as National NFO vice president and Minnesota NFO president in the past, and current state president Joe Neaton each noted the prosperity of farming after World War II. Farming was a way to pay for the war and farmers, as a result, received parity for their products. A move was made in the 1950s to put parity on a sliding scale and, as prices dropped, so did the number of farmers and farms.

The NFO was formed by producers to improve the farmers' price, the two said. Through the Capper-Volstead Act, the new organization, founded in the 1950s, used collective bargaining to gain producers better prices. In the 1970s, the organization created grain, livestock and dairy sales programs. Today it's touting its Maximum Marketing program which is collective bargaining.