Master Dairy Commodity Meeting 1980 a

this is your dairy commodity Department report from the 1980 convention of the national farmers organization at Cincinnati first we have this song and some very interesting words recorded especially for the nfo it's called life of a farmer he works in the business Bailey always borrowing money from the PC Sidda people's wages again counts on money they say the only way for the is all get together join me a farmer's gotta be a different kind of guy always working harder with a little more time this props are all ready to market ego city people's wages are getting while it farm accounts they say the only way for the farm is all get together and join them next year at this time I did hear some of them say that they were going to make reproductions of that okay that's the answer well it's 10:30 we'll start the meeting I want to welcome all of you here and even though I've been around quite a while there is still some that I met for the first time last night so I am ed graphs the director of the department and we got news the other day that Huell done from Kentucky was killed cutting wood he will done had worked for us for many years I believe he had a milk truck and in his memory I'd ask you to stand just for a moment of silent prayer amen there are three of us going to take part in this meeting today myself Ted McCarty director of operations and al Scott who is assistant director of operations and in charge of the training program that we have instigated now and which is paying off and there may not be time for any questions in fact I'd prefer not to have questions at this meeting as Braniff Brown announced yesterday but after the meeting following this one which starts at 1:00 or 1:30 we'll take all the time we want to answer questions or if you wouldn't be here if you wanted to write them out we'd be glad to answer them then because it's one thing always our sometimes hurts if you cut people off in a question answer period and we have to do it because of time but we still feel this is the only time of the year we can get together from all areas either United States and we want to give you all the information we have we want to get input from you people and we do have a room it's room number 200 they tell me that it'll hold as many people as we got in here that will be available we'll have someone in there a small group so you want to come in individually or whatever if we can help in any way so after the third meeting we will have general question answer I'll have all the regionals here on the podium with us because there are probably things happening in the area that they would have the answer for that we do not yesterday when I addressed the convention just for a short time I tried to call attention to that brochure which points out that there is a difference in the National Farmers Organization dairy program and the marketing programs of all the other marketing groups whether they be cooperatives whether they be independence there's a major difference and it has been of concern to me for some time that more of the people more or less look at us the same as the same type of an organization as a dairy co-op or another marketing group there is a big difference the points we tried to establish is for you to look at that there might be just one point and no 16 or 20 that are listed there that really make the difference that would help you in talking to somebody else to get them to come with the National Farmers Organization put their production into the organization for better bargaining power my part in this program today is to try and perhaps refresh the memory of some of you and to get the newer and younger members to understand what has happened in the past I'm happy to say there are new young members because before we're through will tell you of the growth that we've had in the dairy department in this past year even after we have closed down some areas and we'll tell you why we did that last night I had a very pleasant surprise I don't know the name of the young gentleman but I've forgotten even the name of the farm is that Lafayette Acres that young gentleman in the meeting today though is that the name all right there is the young general would you please stand up tell us your name Carl babbler from Wisconsin Carl if I remember this right you milk about a hundred and thirty cows you saw some of the pictures of the farms out here I was real impressed those pictures came in from the various areas and it kind of reminded me of one people used to say you know was a scum of Agriculture that belonged to the nfo I'd like to see him beat some of those pictures of those farms we could see out there Carl was telling me that he just recently put his milk with the organization and he said it took our twig who is a new director coming on the board for years to get him to do it well the reason I'm talking about Carl is because he brought something back to my mind do you remember the meeting in Omaha Nebraska the convention when we said watch the test on your milk I hope I got this right Carl if I've wronged you correct me ahead of these people I don't think you've got a milk check from the nfo yet through the system have you not yet but Carl did tell me this that where he had been selling his milk before he had never gotten a test over 3.75 until after you moved the milk then you've got a test and it was 3.8 is that right so he has had three tests run through the NFL program and he has nothing under three nine as of today now that's a am i right on that Carl and I told Kyle last night do you see how this three point five price is deceiving so often and that is what has kept many farmers from coming into the NFL program we get that from our staff day in and day out because they simply say what are you paying is though we were buying the milk from them there's a big difference in my short period of time I want to go back and refresh the memories I hope of some of you have been with the organization a long time to make a point of this difference to the younger people in the audience those have come with us recently there are probably things here that maybe you never heard of Walt Hackney I think hit it right on the nose when he said from the podium the other day are some of you getting kind of tired that would bring smiles to some of your faces and it it well should but in thinking it over I thought he did a tremendous job when he said have that two young couples stand up you kind of recognize now while you've been at it this long and why we have a right to be optimistic today but not satisfied with where we are back in 1972 from May of 72 to March of 1974 we didn't have much of anything to do any program established to do anything for dairy farmers but to try and raise the price of milk once we understood that the base price of milk is established in Wisconsin and Minnesota the base price of milk for all the federal orders in the United States so that's when we were criticized as being very inefficient not knowing how to market milk when we could have let the members milk go into the plant right next to their farm very efficient trucking probably paying as much or more as we could get anywhere else and we'd load it on a truck and truck at a hundred miles away when you took the trucking out of it and the inconvenience the opposition said they don't know how to market milk but you never heard one of them come out and say that because of that effort there was an impact on the market that raised the base price of milk for 22 months in a row now the real importance of that was raising it in April May and June when that tremendous volume was out there and they always said well there's just too much milk the prices got a drop didn't drop because of what we were doing but it took a lot to keep farmers sticking together and get them to understand that we can raise the price of milk as farmers and it happened in fact it went up exactly three dollars and 21 cents a hundredweight in 22 months and we challenged everybody to beat our price and they did it and it made us look kind of stupid because to the farmer that didn't understand what we were doing and how we were affecting markets it was hard to believe but let's go to today Carl what did the what did they buy err your milk do immediately when you left what kind of a premium did he pay 11 cents jacked it up 11 cents one thing that the dairy farmer I know doesn't recognize is the impact that one of you can have in the dairy industry in a given area or two or three of you there's nobody in this audience at this convention that got stars in their eyes believing that this is going to be all taken care of in six months and we're going to have cost of production it's all over we have those stars in our eyes in 1960s I did anyhow it wasn't that's easy but you still have that tremendous impact today when that production comes with the National Farmers Organization well that was the movement of milk that had an a' bargaining impact and that's the difference number one in someone that buys your milk keeps it right in his plant makes a profit on it and then he goes out and tries to tell the producers but the nfo don't know what they're doing in 1973 I want to talk about the old system rather than individuals if I mention individuals through cooperatives names or anything like that it's not to stand up here and try and run somebody down it's the old system that we've got to change build a new system let me say that and that was in 1973 when at federal order hearings the old system actually testified asking to have the price of milk dropped was there anybody here that was at the Chicago federal order milk hearings there's your evidence - the younger ones are those that may have don't remember they testified and I've got the prints here this is a nasty one Chippewa Falls Wisconsin this came from a farmers union news a MPI leads the move to stop fluid milk price increases they took to the lead to stop the increase in the price of milk how many of you marketing to them got another one in here somewhere so just about the same thing but the nfo took odds with him that's the main point we said we need higher prices we testified to get higher prices and it was then that somebody reminded me out of meeting one time that I said look you're gonna take a blood bath and prices of milk if something doesn't happen here if you don't do something and in April of 1974 through May June and July the blood bath came about the drop and the base price of milk a dollar and 86 cents and four months any of you remember that one you bet well what did we do about it we said it was going to happen and let's take a look at why it happened the old system turn that on these are not real plain but look at those years of 73 point to them we'll yell 73 and 74 and up up on the top it lists the products it shows the increase in the imports for instance from 72 to 73 we increase from 66 million pounds to a hundred and fifty million pounds is that in milk fat all right and then in 74 dropped back a little bit to a hundred and eight million pounds but look at the other years that was three point five and two point six percent of all the production used in the United States that was imported and we move over that same year to the milk solids nonfat and you see they went from 67 million to 335 and then 216 that was 4% of all used in the United states in 73 and 2.7% in 74 the shocker to me of course was butter and there's a big story back of that one but I won't take the time to go into it imported 55 point six million pounds compared to 0.7 million pounds or 5.5 million pounds the year prior near after and in cheese which is all we've always had large imports of cheese but they increase that from 179 to 229 and to 315 and then the big one was of course in the nonfat dry milk and this should just make every dairy farmer upset almost is it much upset is the system that markets milk for you today and claims are doing a great job for you on dairy products and then manufacture margarine nonfat dry milk went from 1.6 million to two hundred and sixty six point million and 115 nearly 25 percent nearly a quarter of all the dry milk used in this country had to be imported is it any wonder that we could say you're gonna take a blood bath and that's what the old system did to us just remember that if some of you have any doubts as once somebody this morning said I wonder why I joined the nfo let me refresh your memories that's what it costs I don't know what that could be added up to in dollars and cents to all the dairy farmers in this United States what happened just right there in four months do you know how long it took to get that back it took 13 months to get back what you had lost in three months took 13 months of paying if anybody thinks they'd pay dearly to belong to the nfo let them figure that bill up once see what that costume now from September of 1975 the base price of milk and I'm when I say base I'm talking about Minnesota Wisconsin series it was 827 and in January of 1976 it was 890 from 27 to 890 in five months it had gone up 63 cents now that's an average of 12 and a half cents per month but then in February of 1976 we saw what the old system did to us again when the price of butter dropped twenty-seven and a half cents on the Chicago Mercantile Exchange how many you remember that one all right was the nfo due for farmers first of all we printed up 5,000 of these brochures and though it's not too plain it says dairyman can you take a drop in your milk price of a dollar and a half 100 by spring of 76 if you can you don't need to read this 27 has half cents in two weeks to effect the base price that's the old system we called for an investigation and of the Mercantile Exchange and January 9th butter prices rose 5 cents under pressure of the investigation called by the National Farmers Organization butter prices what happened to the base price that's all L the base price of milk the following month went from eight dollars and a quarter to eight dollars and sixty cents right back up thirty-five cents now this is what was reprinted in the farm journal it simply said or this is what they reported the base price the MW Series price which fluid milk prices are based moved from February 825 to 860 all in the face of increasing milk production heading into the flush it embarrassed just about everybody including the United States Department of Agriculture did you get that it bounced right back because 5,000 of those were distributed we went out we called the meetings throughout the United States stop these drops we've used it successfully twice and this organization that's why you joined it and that's why you're working and that's why the benefits are here 1976 in April the price dropped back to 844 that's following the increase to 860 and it ended up in December at 825 there wasn't much gain over those years what was beginning to happen in the national farmers organization how many of you saw in your own counties or maybe it happened to you where you left the program because we weren't competitive do you remember them losing some producers around you at least you bet you do because we saw the results in Corning Iowa we saw the figures and it was beginning to get scary we knew at that time that the farmer didn't know why he had joined the national farmers organization and we knew at that time that we had people out there that were doing a better job selling their program than we were in selling ours and they were doing it on the price whether it was a dime 15 25 35 or 50 cents a hundredweight but I'm talking of affecting the market price 50 cents a hundred in a couple of months or three dollars and 21 cents over a period of 22 months and being able to do it because of the support of farmers but when they started to leave we knew that we had to do something and do something that would turn this thing around right now we're facing something with the farm bill coming up but I don't know how successful we're going to be we will be working to protect the dairy farm income in every way we possibly can but you know it's anybody's guess right now just as what's going to happen the cheap food policy in Washington DC is very evident in closing the meeting I need about five or ten minutes just to tell you and show you how it's going to be easy for you to make a choice as to how you feel about the National Farmers Organization program the old system and what we're up against with the government and the economy as it is today but the bright spot the brightest spot that we have seen for years and that is when I said yesterday that of 52 weeks we increased in production 50 of those weeks there was a couple we held even on now by month we've gained every month we set some goals that al Scott's going into to discuss and Ted McCarty will tell you about where we stand today what it looks like as he sees it coming from the industry and I don't know what you think of is a good game but we have never seen a game like we've seen in our production in this past year since we turn this around and I see no reason to have it stopped now because last year we gained 20% over the production of the year before and that's something to be pretty proud of mungyu very farmers have put that production together so I'm gonna turn this over to Ted McCarty at this time tell you what he sees as of right now then Dale Scott to show you how it was done and what ways it was done and the methods are working because the farmers do want what the national farmers organization is offering it's just men our inability to get through to them but things are looking brighter right now so I'll turn it over to Ted McCarty at this time Edie told you as delegates yesterday something has to play button Jeff Withey had all the time after the bring this thing there every time I finally have to bring the mic down he told you yesterday I was going to tell you where we are I think I can sum it up in a few words we're in great shape that's what the people in Washington tell me dairy farmers making more money than they ever have in their life cost of production is $11.30 according to mr. Howard you're and you're getting an average price of about $12.50 you're making all kinds of money so why are you here so that's where we are we've never been better believe that one compared to what to the hog producer who was producing hogs at a cost of $42 and selling them for 28 yes we were better to the grain producer who was going broke yes we were better so does that mean that we dragged all segments of Agriculture down to the lowest level of a bankrupt producer talk to Washington and that's what they say so we go in and we argue 8:00 you got your guns aimed in the wrong direction don't even at the dairy farmer figure out how you're going to get the cost of grain up how you're going to get the price of meat up not how you're going to reduce the price of milk to get us in the same position yes when I spoke to you last year about this time this is my third convention you're getting approximately a dollar 100 weight more today and you were a year ago this time big deal so what your cost of production has gone up - interest rates everything you buy is going to continue to go up milk production this past year was up about three to three-and-a-half percent over last year we head in United States about a hundred and twenty seven and a half billion pounds of milk production production per cow was up 30 pounds per month that didn't come from breeding that came from given old Bessie two scoops of green instead of one that's where it came from because we don't get that much in one year through efficiencies in breeding and we had milked one percent more cows than we did the year before which means a lot of the marginal producers were still milking them they're still hanging on and in the meantime consumption love all of dairy product was down 2% so everybody's in an uproar productions going up consumptions going down all the expenses a taxpayer and that's the story we get when we went to Washington to argue this past fall why they should not decrease the support price and it was a very serious situation and they were trying to get a consensus of opinion from the dairy industry we were invited after being asked to be invited and they did not have a consensus when they invited us to go we said malarkey no way the farm bill requires you to go to 80 percent of support and you're not going to hear us representing dairy farmers saying we agree usually reduce it to 75 no way we did not do it so they did not get a consensus they were trying so he backed off of it stocks of commodity Credit Corporation or high no question about it but the thing is that in the 30 years did the support program has been in effect 30 plus as 1949 the Minnesota Wisconsin price series has acceded to support price for 26 out of those 30 years so how much help are we getting out of the support price and my opinion and we had consumer representatives at this meeting in Washington the support price benefits the consumer more than it does the dairy farmer because it stabilizes the price of milk it assures them an adequate supply at a reasonable price that's the reason for it so they're the benefactors of it more than a dairy producer but then they complain every time it goes up and we ask them how about minimum wage goes up oh that's fine have you hear the song we're playing that our dairy boobs and so forth listen to that a little bit that tells you the story whether consumers are saying but we argued on the one hundred and five percent buyback price or what the government calls sell back because during last spring we had high milk production interest rates were running twenty percent money was tight it was a slumping economy industry could put their inventories into the government get cash in their pocket no investment and buy it back at five percent more than they sold it to the government for they could not afford to store their own product and I don't care what we think industry is going to make a profit and the government gives them a way to do it believe me they're going to use it and I don't blame them it's not their fault they're using what the government gave them we have seen instances where quantities of butter last spring were turned over to the government I have not been able to prove it but I've got very good suspicions that whole warehouse is full of butter were turned over to the government never left the warehouse never left the warehouse and the government paid them storage because the government doesn't have refrigerated facilities the government have paid them storage to store their product and they could look out their back door and watch it and when they needed it they bought it back at 5% over and it cost them a heck of a lot more than that to store it in their own warehouse particularly at 20% interest and they're also drawing rent on their owned refrigerated facilities for where we go October 105 % again same old thing now last year and I've listed the Economist so much that sometimes I fall into the realms of using some of their terms but and I'm not an economist I'm a lawyer I put economists at least four steps below lawyers and that might be partial but an accountants are somewheres in between below but we had an improved milk feed ratio there's no question about it and milk feed ratio is the cost of concentrate that will equal hundred pounds of milk that was improved no question about it because dairy prices went up grain prices stayed low so that's where we are where are we going in an 81 hold on to your pants because here we go I don't know okay first of all we've got to change the administration the president farm bill does not expire until September of 1981 so under that farm bill the last adjustment of 80% is due April 1st I feel and I could be wrong that the president ministration that goes in on January 20th is not going to have time to try to amend the present farm bill and we will see 80% of parity on April 1st I estimate that that price will be up 30 no will be up 85 cents to $13 and 65 cents now today the Minnesota Wisconsin price series for October November will be announced Friday was 12 hours of 42 cents still 38 cents below support so support requires no one to pay it it's just a nice figure the government puts out is this is what you should pay but does not require payment of support price as you can see Minnesota Wisconsin where the manufacturing plants are the average price is 12 hours and 42 cents not 12 dollars and 80 cents and 80% of support is really not 80% of support the government and the economists for convenience sake I guess leave out one little word and that's called equivalent but they said it at 80% of parity equivalent and that's a ratio so if you'll take parity today which is of $18.80 and take eighty percent of it you're gonna be about two bucks short and that comes with that little word equivalent that they don't talk about so it's a rather expensive word that they leave out but when we say 80% of parity in reality it's about 72% 73% so beyond April 1st I don't know there's going to be changes yes the October 1 price will probably encourage dairy producers to hold onto the marginal cows for the price going up probably continued to feed but then we got two things coming up now - thank goodness because we ran all commodity organization we got meat prices going up and you're going to see higher colqhoun prices come the first of the year I'm sure you're already seeing higher concentrate prices today and you're going to see them even higher so instead of giving Bessie two scoops of feed you'll probably cut it down to one and a half right now and maybe eight months it'll be one scoop of feed and we'll take care of our own excess production and what excess is I don't know because I don't know anybody is pouring milk down the drain that's what I consider excess but it's not going down the drain it's going somewhere as it's being used if we had no imports we would not produce enough milk for the consumption of the people that this united states but still we have a surplus of milk odd things and a gentleman that came up with all these ideas mr. Howard short who the chief economist of the Department of Agriculture was awarded a $20,000 incentive bonus this year for coming up with all these bright ideas above and beyond the call of duty but he couldn't take it all because the Department of Agriculture has a rule that no employee can make more than the secretary and $20,000 would have paid in more money than Bob berkland was making so he could only take about 16,000 of it so he didn't get it at all so maybe they'll raise the Secretary's pay so the next economist can get the full twenty thousand I don't know what's going to happen but we're going to see higher colqhoun prices but we're also seeing you know it I see them we got a lot of young stock out there better producers than in the old marginal cows is gonna go to the hamburger so we're still going to keep producing milk but we've been in these situations before but the final analysis is that the competitive price of milk has been higher than support for 26 out of 30 years what's going to happen after October 1st I mean after April 1st they're predicting the economists and the agricultural outlook conference held in Washington couple weeks ago the milk production this year is going to be between 129 130 one and a half billion pounds of milk again plus 3% over 1980