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 Bill Rowell

July 27, 2011

Genex Profit Alliance

Arlington, Virginia

Introduction and Remarks

   Ladies and Gentlemen, please pause to recognize our young men and women in the military - we ask for their safe return.

Thank you everyone, I am Bill Rowell, a dairy producer from Vermont, and chairman of the National Dairy Producers Organization, it is my pleasure to be here today. My brother Brian and I milk 950 Holsteins in northern Vermont not far from the Canadian border, Brian's son Matthew is now 16 and expects his opportunity to continue the operation, he's a capable young man. His sister Megan is 14, an honor student and potential candidate for nutritionist and CPA,  it isn't clear that it would be in their better interest, but it will require a high level of commitment and expertise to continue.

   During the downturn of 2006,  we watched trailer loads of milk leave our farm well below what was considered fair market value, the next crisis had already been predicted for 2009, and it was to be followed by yet another sometime during 2012, so on and so forth;  we recognized our lack of control over the situation then, and its similarity to the 50's and 60's on our Dad's farm.  We agreed that change in national dairy policy would have to take place one day soon and finally recognize the producer as being key to a viable dairy industry, that it would be necessary to develop management tools to address the needs of the producer, and that allowing industry partners to speak for producers all these years had been an apparent oversight on our part, the producer community.

   The National Dairy Producers Organization is relatively new, its board of directors consist of producers from across the nation, it is a diverse group whose number 1 priority is producer profitability and sustainability. Some months ago when Foundations for the future was first introduced and moved to the forefront, we had to recognize the diversity of opinion among board members with respect to dairy policy, and the need for board support of a stated position. Since it was recognized that proceeding from a single point of view was not representative of our board, or of the producers interests which we represent, a board decision formed two committees:

 1) The Bill committee, worked to draft a proposal addressing the needs of the producer sector and identified components essential to help ensure a future for dairy producers, and

 2) The Amendment committee, worked to enhance National Milk's program, Foundations For The Future, in hopes of making it more representative of the needs of the producer sector.

Prior to this effort, the board had discussed many issues confronting the dairy producer, and there are many, 10  were identified as being of highest priority, and those were followed by an additional 10, if you go to our website www.nationaldairyproducers.org you will find them listed in a document entitled “Contract with Producers” in which the board of directors make a commitment to serve as advocate and provide a national voice from the producers perspective.    A bill proposal was developed by that committee which addresses 14 of those 20 issues. 

   Regarding a bill proposal, the goal was to make milk profitable for the producer with minimal changes to existing dairy infrastructure, it appeared that it could be done, but would require success in 3 areas:

1) Supply Management – manage the supply of milk used in inventoried products; if milk used in butter, powder, and cheese was profitable, all milk would be profitable. Class I and II would not be regulated.

2) Milk Price – remove the CME as the milk price setter and substitute it with a regional price survey mechanism to determine the average regional milk price, and back it up with a minimum price of not less than 80 % of the monthly average cost of production.

3) Imported Ingredients – establish reasonable limitations and regulations, and enforce them.

During our discussions on imports we noticed that Country of Origin Labeling wasn't gaining much traction ( it was on that list of 20) , so we patented a 100% USA label; some of us think we work for ourselves, most of us feel we spend too much time working for the government, but the real boss here is the consumer.  We recently generated some excitement with DMI, and are now in the process of doing a pilot project with them to determine consumer acceptance of the label.

   Many recognize the incredible effort put forth across this country by producers, producer organizations, co- operatives, National Milk's task force, many of our congressional delegates and their staff, and others who have worked exceptionally hard to find higher ground for the dairy producer. So, on behalf of the U.S. dairy producer, I would like to offer everyone our thanks for the effort, and since we repeatedly find the producer in crisis, lets complete this task with a meaningful response to the problem. I am pleased that we have finally gotten to the point we're at today, it's really quite exciting but time is growing short as we approach 2012, the producer community and its vendors understand our landscape will change significantly if we face another crisis like that of 2009 under current policy without meaningful tools.                                                                                                           

   I would like to point out  that dairy is a $110 billion industry fiercely protected by those who profit from depressed milk pricing, perpetuating a cycle which requires export markets to achieve balance may be good for processor profits, but it has  reduced the number of dairy farms in this country to a fraction of 1/12'th their size since 1970; this has come at great expense to our government, and has caused much harm to a lot of good people . I very strongly hope that it has become blatantly obvious to everyone, that producers are neither willing or able to subsidize the export of dairy products in the name of commercial disappearance. IDFA's opposition to supply management is understandable, it would place a control on overproduction, stabilize the price of milk, and redistribute risk to the entire industry, but their chief concern is input cost. ( A $ 1.00 increase in the price of milk represents an additional expense of $ 1.8 billion per year, to the processor.)  The processor can turn a profit through a more legitimate means than by encouraging milk oversupply ( which clearly represents a stranglehold over the producer sector and ensures depressed milk pricing) , or by diluting the market with imports, or by targeting the producers potential for profit as an expense. Agriculture in this country is an asset, it represents the highest quality food supply of anywhere in the world, producers are an industry partner that would be difficult to replace, and as good Americans we all have a responsibility to protect our domestic food supply.

   I will speak briefly about the amendment committee, it was understood that Foundations For The Future as presented was a discussion draft, the opportunity it represents is worthy of support but two items stand out: 1) signal to the farm -  move the trigger closer to the producers break even point, activate the management tool in a more timely manner, establish benchmarks and use NASS monthly storage reports to improve program response and effectiveness.  2) price survey -  use the regional average price of milk and change the survey to include plants using 250,000 lbs. per week rather than per day, to be more reflective of the marketplace. The amendment committee will attempt to reconcile any difference of opinion through our congressional delegates. In the meantime, the bill committee has developed information as a practical response to the issues we face, it is straightforward, brief, and well worth your time, give it a read. Finally, everyone needs to understand the producer can work for little or nothing, but they can not work for less than nothing and sustain a viable dairy industry in this country.       

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CONTACT :  billrowell@billrowell.org