A commentary by Joel Greeno of MinutemanMedia.org.
Despite recent media hype, farmers are not getting rich off record prices in the dairy case. The cost of milk has gone up 50 to 60 cents in the past few months, with consumers paying close to $4 per gallon in Los Angeles, Chicago and New Orleans. But dairy farmers are still getting less than half of that money — about $1.60 per gallon.
Rising fuel costs and corn ethanol demands are partly to blame. Intense drought has also meant wilting pastures and hay crops. For the first time, the creek that normally waters my cows has dried up and my milk production has dropped 50 percent this summer. But the real culprit behind the dairy crisis remains corporate greed.
The lion’s share of consumer money spent on milk continues to line the pockets of corporations: Kraft, Deans, Wal-Mart. Worse yet, consumers have been convinced to pay almost the same amount for skim and 2 percent versions of the real thing after the most valuable butterfat has been skimmed off to make other dairy products.
There is no free market for fresh milk in the U.S., unless you buy it directly from a farmer. Consumer prices are calculated by the U.S. Department of Agriculture through a bizarre, outdated formula and the federal market order system. This USDA-imposed “price” is based upon secretive trading of 500-pound cheddar blocks on the Chicago Mercantile Exchange. At the request of Sen. Russ Feingold, D-Wis., the General Accounting Office recently concluded an investigation of the Chicago Mercantile Exchange, which found it prone to market manipulation and price fixing.
This rotten system truly becomes rancid with globalization. The U.S. has been a dairy deficit nation for years. For corporate agribusiness, it is much cheaper to import casein, butter substitutes and milk protein concentrate (a questionable dairy waste byproduct) from New Zealand, China, India, Ukraine or wherever, than to pay U.S. family farmers a fair price for domestic milk. In April, the U.S. imported 11 million pounds of milk protein concentrate.
Because of this type of abuse, farmers have been stuck with below-parity prices for decades. Even the USDA’s numbers indicate that it costs farmers more than $30 to produce 100 pounds of milk, yet the floor milk price (like a minimum wage) is set at $19 per 100 pounds.
Under the federal price support system known as MILC (Milk Income Lost Contract), I am expected to lose $8 per 100 pounds to receive a 33-cent per 100 pound subsidy because the “free” market won’t cover my cost of production. That means, on my farm, I lose $3,600 per month in income to claim a $148.50 check from the government. And our politicians think they have done family farmers a favor with this subsidy system, when they should be demanding that the corporations pay a fair price!
Parity pricing is an old idea that needs to be reclaimed as part of the wider debate of fair trade versus free trade. Whether it is coffee, oranges or milk, farmers cannot expect to survive when they do not receive a livable income to cover their costs.
It hurts me to see the hillsides that once had soil-building pastures and grass-fed cows taken over by endless eroding rows of biotech corn and soybeans. It hurts even more to know once-strong farm families have been destroyed by unfair market prices.
For more than a decade, Family Farm Defenders has run a domestic fair trade project with Cedar Grove Cheese that helps consumers get their dairy dollars straight to family farmers. The National Family Farm Coalition has been working hard on the 2007 Farm Bill, demanding mandatory country-of-origin labeling, calling for anti-trust action against the food giants, halting taxpayer subsidized commodity dumping and defending local control to enact tougher rules than the federal government, ensuring fairer prices for farmers and consumers.
Farmers want a living wage with dignity, just like everyone else. There is more than enough money in the marketplace to provide farmers a decent income and healthy, affordable food for consumers. Farmers and consumers need to work together to reclaim our food system. Otherwise, we’ll just keep getting the dregs.
• Joel Greeno is a dairy farmer near Kendall, Wis. He is president of the American Raw Milk Producers Pricing Association, vice president of Family Farm Defenders and an executive board member of the National Family Farm Coalition.
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Does that mean that Uncle Sam has teets?