Dairy cooperatives and milk processors agree on pricing

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(Host) Vermont’s two largest dairy cooperatives say they’ll support a scaled back plan by dairy processors to increase milk prices. The new plan won’t have the impact of the original proposal, but the cooperative say it’s still an important beginning.

VPR’s Steve Zind reports.

(Zind) Saint Albans Cooperative Creamery and Massachusetts based Agri-Mark are members of the National Milk Producers Federation. The co-ops in the federation account for most of the milk produced in the U.S.

In May, federation members announced they would work together to shore up milk prices. The agreement was called the Cooperatives Working Together Plan. It involves paying some farmers sell their herds or cut production to reduce the milk supply. It also provides subsidies to spur cheese and butter sales to foreign markets.

To support the plan, farmers would pay eighteen cents per hundred pounds of milk they produced. But with milk prices beginning to rise from historic lows, the farmers balked at the amount they were being asked to pay and it became clear the plan was in jeopardy. Leon Berthiaume is general manager of the Saint Albans Cooperative Creamery.

(Berthiaume) “When you look at the input from farmers and dairy cooperatives from across the country, there were certainly different positions being taken. In some cases, the cooperatives would not take a position on behalf of their members. Other felt that potentially milk prices were moving forward without such an initiative.”

(Zind) The co-ops have approved a revised proposal that would levy a much lower fee of five cents per hundredweight. Berthiaume and Bob Wellington of Agri-Mark say the plan won’t be as effective, but the co-ops will support it. Wellington says it’s important that the co-ops keep working together.

(Wellington) “It’s going to have a smaller impact, but the key thing is that we’re still going to have dairy farmers representing 70% of the milk in the country sitting down at the same table with the same objective in mind and that, to me, is worth moving forward with the program.”

(Zind) Wellington says the current plan isn’t going to fix the problem of low milk prices. But he says the Cooperatives Working Together program establishes a framework for future efforts to boost milk prices.

He says the cooperatives will still have to prove to farmers that the money they’ve put into the plan is showing results.

(Wellington) “Can we show the farmers that we’ve effectively used the money they’re going to be contributing to impact their price? I don’t know the answer to that but we’re going to work at it, but we’ll find out in the next few months.”

(Zind) The Milk Federation is expected to finalize the details of the Cooperatives Working Together Plan this week.

For Vermont Public Radio, I’m Steve Zind.

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