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STEVENS POINT, Wis. - Dairy farmers have plenty of questions and opinions about Foundation for the Future (FFTF). That's the proposal offered by the National Milk Producers Federation (NMPF) to change the federal milk marketing system, offer price protection to farmers, and establish a milk supply control program.
A so-called "grass-roots" meeting at Stevens Point, Wis., drew 40 people and prompted several farmers to ask questions and criticize FFTF.
One criticism that was brought up more than once is that the program's on-again, off-again supply management mechanism might harm milk production and blunt the progress farmers and processors have made in developing new products and new markets.
Ken Heiman, Marshfield, Wis., a dairy producer, cheesemaker, milk bottler and Wisconsin Milk Marketing Board (WMMB) director, said the state's dairy farmers have been spending upwards of $28 million a year to promote specialty cheeses. What's more, Wisconsin processors buy milk from "all over the country" because of a shortfall in supply.
In recent years, Heiman said, farmers and processors have "expanded tremendously." So, regarding the supply management component of FFTF, "I don't see where we're going with this," he said.
Responding, NMPF Chief Executive Officer Jerry Kozak said he does not see FFTF hurting farmers' pay prices or harming its growth in milk production. Kozak said a survey of Class III milk prices showed that farmers nationwide would have gotten an average of 70 cents more per hundredweight for their milk under FFTF.
"We don't think anything we've done here is going to have any negative impact on cheese prices or the price farmers get paid for their milk," he said.
Jerry Meissner, Chili, Wis., said he feels "very good" about "quite a few elements" of FFTF. Yet the dairyman added that "the state of Wisconsin, as a whole, cannot support the supply management portion of it." Meissner said he has been "excited" about the dairy industry for the last five to 10 years, due to innovations like specialty cheeses.
Bankers and cheesemakers alike are "very concerned about the supply management portion of this," Meissner said. "We want to keep growing and expanding, just like any other industry..."
Kozak said, "I don't agree with you in any shape or form that the (FFTF) market stabilization program is going to stymie growth."
Randy Peterson, Wilson, Wis., worried that his son might not be able to join the 30-cow Guernsey operation if a supply control program is set up. Peterson also said he has been told that farmers would have to pay income taxes on any extra milk they produce if the supply management mechanism kicks in, even though they would not be paid for that milk by their processors.
"That's not true," Kozak said. "I don't know who told you that. If they're in the audience, I'd like you to point them out to me."
Sarah Lloyd, Wisconsin Dells, who, with her husband milks 330 cows, said, "I don't want us to back off of trying to demand a just price" for milk and other dairy products. Lloyd, president of the Columbia County Farmers Union, said perhaps FFTF could be altered to contain a mechanism that "actually responds to what's being paid in the store for our dairy products."
Kozak said dairy processors "don't control the retail stores." The only way to turn Lloyd's idea into reality, he said, is to have "a government mandate" that sets minimum and maximum prices for dairy products."
Wisconsin Farmers Union President Daren Von Ruden, Westby, said he is concerned that FFTF's "margin protection" portion would only cover a farm's feed costs. In reality, he said, farmers need to cover all their milk production costs.
Farmers can buy extra margin protection beyond that offered in the basic part of FFTF, Kozak said. The Foundation for the Future Committee wanted to make that coverage "extremely affordable," he said.
Dairy producers would be able to buy margin protection that's worth $2 per hundredweight for just 15 cents per hundredweight, Kozak said. He called that "untouchable" compared to the federal government's Livestock Gross Margin-Dairy (LGM-Dairy) program.
Todd Doornink, who farms near Baldwin, Wis., inquired about the cost to the federal government of administering aspects of FFTF. Said Doornink, "I don't believe there's anything in the world that's free."
Kozak's answer was that FFTF would cost "$166 million less, over five years, than the present programs we're operating under," citing the Congressional Budget Office (CBO). He said the baseline budget for the federal government's dairy price support program and the Milk Income Loss Contract (MILC) program stands at $762 million.
The NMPF proposal has county Farm Service Agency (FSA) offices signing farmers up for aspects of FFTF. Those FSA offices "are already there," said Kozak, so costs should be "minimal."
John Pagel, Kewaunee, Wis., asked whether the supply control section of FFTF would be based on pure pounds of milk a farm produces. Or would it take into account the milk's components?
A farm's milk production would not be adjusted for components, said Jim Tillison, chief operating officer of the NMPF's Cooperatives Working Together (CWT) program.
Pagel also asked if FFTF suggests dismantling the LGM-Dairy program. Kozak said that is not being proposed, but the NMPF would "encourage" farmers to use it.
Kozak noted that the $20 million set aside for LGM-Dairy this year has already been spent. "But we support it as an additional tool," he said.
Carl Flaig, Junction City, Wis., asked whether he would have to participate in both FFTF's margin protection and market stabilization efforts. No, said Kozak. Participation in the margin protection aspect would be voluntary, but participation in the market stabilization aspect - with its supply controls - would be mandatory.
Kozak went on to say that during 2009 - a year that brought steep declines in milk prices - farmers would have netted $1.84 per hundredweight on all their milk if FFTF had been in place. "That's a lot of money," he said.
"People are looking only at what it (FFTF) costs them. They don't understand that if you're investing $5 and you're getting $65 back as a result of the impact, that's pretty good," Kozak said.

One meeting left
The NMPF has one more meeting on FFTF remaining on its schedule. It takes place Aug. 22 in Nashville, Tenn.
Besides meetings in Stevens Point and Green Bay, Wis., the NMPF has taken its proposal to dairy farmers in Washington, California, Texas, Minnesota, Iowa, Michigan, Pennsylvania, New York, and Florida.
More information about Foundation for the Future is at: www.futurefordairy.com.
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