WANT A PROFITABLE MILK PRICE? "Every 1% change in milk production results in a 10% change in price" so says Michael Swanson, Wells Fargo ag-economist in Progressive Dairyman, February 7,2018 issue.
Let's reduce the milk supply 5% and move the milk price UP 50%.
The reason dairy farmers are price takers instead of price makers is simply that the milk supply exceeds profitable demand.
The milk supply determines the milk price and dairy farmers determine the milk supply.
DAIRY FARMER -- YOU, and only YOU, hold the key to YOUR success or failure.
Stop the desperate game you are playing -- trying to out produce unprofitable milk prices -- which, if the game continues, will destroy everyone down to a handful of last standing mega-corporate milk makers.
MILK PRICES CAN STABILIZE AT WHATEVER LEVEL DAIRY FARMERS DECIDE.
Let basic supply/demand marketplace economics work FOR you instead of AGAINST you.
Let the marketplace pay you a profitable price for your milk by implementing NDPO's 4 co-op management policies stated below.
RIGHT NOW, the management of all co-ops, which handle 80% of U.S. made milk, could achieve the sustainable profitability of it's dairy farmer member owners by implementing the following: (1) Implement a pro-rata, across-the-board reduction in the acceptance of member milk for processing until the milk supply is balanced with profitable domestic market demand, which provides a milk price greater than the member dairy farmer's average cost to make the milk. (2) Accept no non-member milk and sell no member milk, unless the price paid or received is greater than the member dairy farmer's average cost to make the milk. 3DoW , pratebened with processingfacility, make any dairy product or chase any dairy market that will not pay a milk price greater than the member dairy farmer's average cost to make the milk. (4) Use the NDPO 100% USA Milk Trademark on all co-op made products to promote U.S. made dairy farmer milk.
If existing co-op management do not implement the above policies, the dairy farmer coop member owners must replace them, from the Board of Directors right down through co-op top management, with those that will.
By implementing NDPO's policies the U.S. will end up with as many existing dairy farm families as possible of all existing sizes and locations, and preserve a secure, diversified, national milk producing infrastructure.
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