to Increase Resources Through 10 Cent Assessment
CWT Program Will Address Growing U.S. Milk Production
ARLINGTON, VA – The members
of Cooperatives Working Together voted this week to double the program’s
current five-cent per hundredweight assessment, in order to accumulate
the additional financial resources necessary to address the surge
in U.S. milk production that is beginning to depress farm-level prices.
The higher assessment will begin on July 1st, 2006, and run through
“We’ve demonstrated in the past three years that CWT can help dairy
farmers address a supply and demand imbalance, but we need more leverage
as we look ahead into 2006 and 2007,” said Jerry Kozak, President
and CEO of the National Milk Producers Federation, which manages CWT.
Milk production was up 3.5% last year, he noted, and continues to
grow rapidly in 2006. Kozak said that the farmer-funded self-help
program “risks being irrelevant in the marketplace if we don’t have
sufficient resources to do what farmers expect of us.”
CWT’s current budget does not contain sufficient revenue to fund additional
herd retirement rounds, Kozak said. The higher assessment, to be collected
starting in July, will bring in the additional money needed over 18
months to continue both the herd retirement program, and the ongoing
export assistance program.
“We’ve seen increased growth in milk output recently, with both overall
cow numbers, and milk production per cow, reaching significant levels,”
“The additional nickel
gives us more money to address the supply situation that is threatening
farmers’ prices,” he said.
Kozak said that once the new assessment begins, he expects that the
level of overall participation in CWT will remain at the 74% level
of the nation’s milk supply that it presently enjoys.
“Every one of CWT’s 49 member cooperatives, along with the hundreds
of individual farmers paying into the program, recognizes that the
stakes have gotten higher as the extent of the supply/demand imbalance
has grown. The more money we are able to collect, the more effective
we can be in meeting the goals of our members,” he said.
In addition to voting for a higher assessment, CWT’s members also
modified several other of the program’s features.
First, the regional safeguard levels in the Northeast, Southeast and
Midwest were raised to ¾ of one percent of each region’s annual
milk production, up from ½ of one percent.
Second, Whole Milk Powder was added to the list of dairy products
eligible for export using CWT bonuses. Additionally, Mexico, a major
market for WMP, was added to the list of eligible destinations for
that specific product.
Third, the target price for cheese under the export assistance program
was moved from $1.40 per pound, to $1.30. The target butter price
remains at $1.30 per pound.
Cooperatives Working Together
is being funded by dairy cooperatives and individual dairy farmers,
who are contributing 5 cents per hundredweight assessment on their
milk production through December 2006. The money raised by CWT’s investment
is being apportioned among several supply reduction programs to improve
the national all milk price. For more on CWT’s activities, visit www.cwt.coop.