NFO 157 (AV10655): Fair Prices for Dairy

the national farmers organization the organization that woke America and represents the leadership of agriculture presents us farm report a public information program brought to you in the interest of agriculture rural business and the well-being of our nation by members of the national farmers organization in this area and others interested in having farmers receive cost of production plus a reasonable profit the national farmers organization pioneer of collective bargaining the marketing system to meet the needs of the 20th century US farm report now presents fair prices for dairy with Albin Rust Hillsdale Wisconsin and of the national dairy commodity department for the national farmers organization Mr. rust is a dairy farmer and highly experienced in working with farm groups dairy marketing groups and farm organizations and Oras Kanerva a farmer who was born in Virginia Minnesota he was educated in Finland and now serves on the NFO National Board from Minnesota an assistant in the dairy commodity Department and Dave Ziegeweid a young outstanding dairy farmer from Arcadia Wisconsin and he is also an assistant and the dairy commodity department here now is your u.s. farm reporter thank you I'm Don Mack and before we start in the questioning to these gentlemen about dairy and the dairy industry I would like to ask each one of them for a brief opening statement a statement concerning the importance of dairy to our economy and society I'd like to start first with Mr. Albin Rust Albin what does the dairy industry mean to the economy in our society basically Don the dairy industry is probably one of the most important farm products that is being produced today every man woman and child must drink milk this being the case there is no product or no other commodity that can replace the elements that the dairy farmer does produce to have a healthy nation thank you the next gentleman Mr. Oras Kanerva could we have your opening statements please yes Don the dairy industry is a major component of total agricultural income in these United States the total income at the farm level in the year 66 was five and a half billion dollars which alone accounts for one sixth of the total farm income this does not include income other than from milk which is substantial their milk portion alone to repeat was five point five billion dollars Thank You third guest is Mr. David Ziegeweid a young dairy farmer himself Dave well done we hear an awful lot of what the dairy industry has as far as impact on the national level this is certainly true what I would like to do is to bring it down more to the local level such as my own area or my own hometown we have 70 dairy farmers in my own township in Buffalo County Wisconsin just a two cent a court increase would bring at least 250,000 dollars a year into the cash registers of the businessmen in my hometown on the county level this would be three to four million dollars if four townships serve the Arcadia area which is my hometown at two hundred and fifty thousand dollars per township this is 1 million dollars we have a hundred businessmen in my town this would be an average of ten thousand dollars more in each business man's cash register at the end of the year if the farmers were receiving two cents a quart more it would also reverse the trend of losing our basic industry which is happening across the country is happening in my home township well you're probably one of the youngest farmers in your home community and entering into the dairy field I'd like to ask you another question if I may since you joined the national farmers organization what was one of your reasons on going in with your neighbors cooperating and why did you actually join the national farmers organization well Don I suppose I was a average young dairyman I started out investing in the dairy business as heavily as I have we did everything we could to increase our production when we had our production to the point where we're above average our income wasn't there at this point you look about to do something as an individual you can't do anything this is where organization comes into the picture after investigating the NFO dairy program and the NFO program in general I could see that it offered me a chance to get together with my neighbors in my county across the nation the only chance the only war organization that was actually working on price this is why I joined on my next question I have any explanation here I'd like to point out and have you answer this was on a front cover of one of the nationally known publications the Farm Tempo magazine which is a magazine dedicated for the rural communities and for the farmers it publishes writings by congressman church people and agricultural leaders and as you see here on the front cover it has a quart of beer which they have labeled a price at 80 cents over on the other across the front page as one quart of milk which at this time when this was published this year the average year one quart of milk was 25 cents I think probably the big letters why actually why is there such a great difference from a commodity that is needed for every human being but to supply the minerals and vitamins that we need for the body as compared to a quart of pop or a quart of beer could you ask answer this why is there such a variation between the price well basically people always seem to pay more for a non-essential item that isn't absolutely needed than they do for an item such as a quart of milk that is needed in this very healthful I don't know probably this seems to be true beer at 80 cents a quart soft drinks at fifty to sixty cents a quart I do think that one thing this picture points out we need a much better job of pricing our products as far as dairy farmers are concerned well Mr. Ziegeweid I think you finally established one thing that the dairy farmers are not getting paid enough for what they produce and the commodities that is so vital to our economy and this leads into a question that I'd like to ask the head of the dairy commodity Department this time Mr. rust what would you say is the number-one problem in the dairy industry today Don the number-one problem seems to me as the very fact that the American dairy farmer does not receive a reasonable income we've often heard other groups and governmental agencies speakers of all types talk about the many many problems the dairy farmer has I would agree that they have problems but I think the number one problem is a price after all no one can work or produce without a reasonable price and a reasonable profit the second thing that I see has to be changed is the fact that the American dairy farmer has in the past 20 years lived pretty much as an individual he's been told that as long as he stays in America that he can stay an individual and this is the way he should live but basically it is not true everything he buys is produced by either large corporate companies or well organized groups one way or another so secondly I think his second problem is that he has been an unorganized man Mr. Kanerva you've been a farmer all your life and ever since the year of 1959 to 1960 the statistics show that every week an average of 200 or I should say 2,500 farmers now this is including all farmers have left their livelihood to the farming because of due to low farm prices in other words this means 350 farmers per week have left the farm or one farmer every four minutes for example from the time that we've been on the air here probably approximately two farmers have moved off the farm due to this short of an earned income now I would like to ask you what is some of the solutions that can be corrected to this problem to get this income back to the dairy farmers Mr. West led to right up to the way that this problem can be solved we all recognize the problem as being that of a price which is too low to return cost of production and a profit consequently we then following up the idea realize that this is because of lack of organization on the part of the farmer I'd like to use this illustration here to show what organized farmers could do this is headed loose-ball the loose ball being the answer to the question who is going to control farming we have in the picture government investors suppliers processors other groups and right in the front leading the pack the man that apparently an obvious is going to get the ball is the organized farmer now the unorganized or the farmer that does not belong to a collective bargaining group is not even on the scene it's a parent and I believe this driving home real well there's only one man that's going to solve the problem and that is the organized farmer we in the NFO believe in organization and we believe that collective bargaining can be applied to dairy farming in such a manner that those of us who are still engaged in the ring can return a fair and reasonable profit in our operations and can do so and retain our identity as individual businessmen but that we can only do it through a collective bargaining program that one proposed by the national farmers organization you mentioned collective bargaining and the collective bargaining program which the national farmers organization has been occupying ever since they went into this field and Mr. Rust I'd like to ask you this question now just what exactly is collective bargaining collective bargaining is a fairly simple thing if people will take the time to understand it there's been laws established in the nation so that every minority group if you would put it in that term could band together under one law or the other and apply collective bargaining to their table in this sense the farmer can do the same thing they've established a Wagner Act for labor Congress has also established a Capper Volstead Act for farmers which legalizes them identically the same things that collective bargaining groups do in any other field so the farmer has today and has had for 40 years though necessary laws so that he could organize and price his production if he first organized so collective bargaining is one of those things of where we can all work together on a specific project or problem we can act in sequence as though one owned all the product and sell it in this manner and by doing this compete successfully with the large national dairy groups that do ultimately receive the farmers production and perform sales of it to the consumers so collective bargaining is a way and means of where farmers voice can be heard right from the farm level into the structure that would operate the program and this same voice can be applied to the buyers of his production and in this sense bring about change in farm marketing straight across the board whether it would be dairy products meat or grain makes no difference the law applies to all of them so collective bargaining seems to us in NFO as about the only answer left we've had all kinds of programs as farmers we've built one association after the other we've built small marketing groups from one end of the nation to the other especially on dairy none of these things have brought about any changes we've sat static for 20 years on the same prices we were receiving there has been nothing on the farm front with the exception of NFO it's collective bargaining program to give the farmer away and means of crawling out of the situation but basically politicians large buyers and other groups have put him into today and Don collective bargaining in this sense doesn't take away any individual rights from any farmer it's absolutely on the contrary site of that one it establishes the right for him to do as others do instead of others telling him what he should do so it is a good all-around American program the national farmers organizations started I believe collective bargaining for meat and livestock when did they start the origin of the collective bargaining program for dairy and the dairy products and why did they decide to go into this field for the field- of an area of dairy NFO went into the dairy field namely because there were no other groups willing to take on the job NFO to begin with was a farm organization that did spring up in basically grain and meat areas but the group heading up the organization well understood the dairy problem and therefore decided that this should be taken in in their overall program so in setting up the dairy program NFO did offer the processing industry an opportunity to do what NFO finally suggested as a program and said if this can be accomplished on a talking basis we will not have to spend the time organizing the producer the job can be done strictly from the processing level through the local cooperatives if you marketing groups as we saw them at that time would go ahead such a marketing structure could establish prices handle surplus production and get away from the government's support program as a basic farm program our marketing groups and dairies turned down this offer and at this point NFO did move into the heavy milk producing areas Wisconsin Minnesota Iowa Nebraska North South Dakota New York and so on and started organizing the dairy farmer so that his income could be adjusted along with other farm groups turning now to the point on holding actions the milk holding action that the national farmers organization had and took place last part of March of this year this was probably one of the largest and most spectacular organization actions of all history of these farmers all across the United States it brought not only nationwide coverage in telling the plight of the dairy farmers but the story on what is happening to all farmers and Mr. Kanerva I'd like to turn to you now concerning the holding actions what is probably one of the most misunderstood part of a holding action or for example some terms that they like to use is the pricing action I mean this is a term that the businessman uses on Main Street to put a price tag on his products he calls it a pricing action what would you say that is the most misunderstood part of the NFO holding action the holding action itself is the most misunderstand- misunderstood Don we and the agricultural on the agricultural scene have throughout the ages that we call the law of supply and demand or we could abbreviate that and call it LSD which today perhaps carries a little different connotation the law of supply and demand is what we are supposedly operating under however we find that in today's organized economy people are establishing prices on products prices which will return the cost of production and they backed these demands up by the statement I will not sell for less than this price this is all that we in the National Farmers Organization proposed with a holding action it's merely a pricing action we do not intend to nor suggestion forced allows supply and demand to work in our behalf by running the nation out and food this would be quite an overpowering undertaking but we can make our bargaining power felt to the processing industry and to the consumer through a holding action we want to make this point clear that this is not an attempt to create such a tremendous shortage on the market that the price would climb certainly it could have this defect to some extent but the objective is to bring about the awareness of the need for a contractual approach to the sale of farm commodities and to make the processing industry we realize that we control a large enough volume that they will have to do business with us this milk holding action that we held the last two weeks of March was as you said done one of the most spectacular organized farm efforts ever put forth by farmers in the United States and I want to add organized farmers that did a number of things four major points really were reached through the use of this holding action number one as Don already mentioned they focused attention on the dairy farmers problems and the need for better prices these things were known but they were not dramatized nor were they recognized by the general public and above all the processing industry until the NFO had the holding action it brought public acceptance to the NFO first and foremost and in connection with this it brought the word Collective Bargaining into common use that is collective bargaining for agriculture today you hear everybody talking about collective bargaining for agriculture which certainly Don is a subject in itself I don't intend to get on it but we gained public acceptance this is point number two number three of these are extremely significant from the standpoint of dairy prices as a result of the milk holding action there were held in emergency milk order hearings and in these market order hearings seasonal price drops were stopped prices that normally decline for the summer remains stable and the Department of Agriculture added a 20 cent per 100 weight price increase to the price of class warm milk which is a significant gain if you consider the fact that the seasonal drop should not take place I'm greater importance although a little slower in coming was the result of the forming of a marketing agency in common as mentioned by Mr. Rust here this marketing agency in common and the result of the co-operative dairy industry finally starting to realize that Thursday need for unification of the power represented by the individual cooperatives they have formed two marketing agencies there are perhaps three or four in existence today one of these marketing agencies has gone out to pursue a very you might say militant type of bargaining effort and has bargained for and the today collecting 50 cents a hundredweight will learn about federal market order prices for its members in many of the Midwest milk market order areas this adds up to a total of 77 clear increase for the class 1 industry milk industry totally attributable to the Ella for milk holding action a fourth point that I want to bring in here Don is the curtailment of dairy imports dairy imports threaten to climb to the level of 5.5 billion pounds fluid milk equivalent that is brought in here in the form of cheese and sugar buter mixtures these were curtailed on the 1st of July and are now held down to the level of 1.1 billion now these are four major points done that we know of a certain thing that are the result of our milk rolling action the results that we now are seeing are not quite as flamboyant as these but we continue to get additional results in the form of more and more membership and more and more people starting to realize that our program is a must turning now to the youngest member on the panel here Mr. David Zig weed you're a young farmer what does the future hold for the dairy farmers as you see it as keeping the young farmers on the farm not only farming but active in producing in the dairy commodities well Don I would say for organized farmers the future looks very bright for unorganized farmers the future looks very grim and very limited in my area and generally speaking across the country the average age of the farmers is climbing near the 60 year mark these people don't have very long to farm any young men starting out is going to pay 7% interest for the money he borrows the return is 3 to 4% anyone can see at a glance that Italy for very many young farmers to get started also in my hometown four out of five of the graduates of my local high school leave the town and wind up in the big cities in a very short time this in itself is the evidence of the drain of our resources particularly human resources that is taking place thank you Dave another question that I like to point out to you as just we're running short here on time if you could give me just a brief short answer to it what do you see that fair prices to the dairy farmers can do not only to the economy but to also help the consumer well I think the biggest thing it would do would be to ensure an act with supply of milk the supply of milk has been dropping nationally it would begin to reverse the trend of the young people living more of them investing and farming and taking it up as their livelihood also putting them on a plane where they can earn an equal amount so young men their age and other walks of life another short question do you plan on a going and staying on the farm the rest of your life was this what you would like to make your ambition and your livelihood well done I always like living in the country I still do presently I am working with NFO I think it pretty much depends on whether we are completely successful where we can earn a fair return compared to other young people if this case doesn't come about I think I will be looking for a different occupation gentlemen I want to thank you for visiting with you on the subject of pricing for dairy and dairy products the ultimate goal of the National Farmers Organization commodity department program fair prices with master contracts until this goal is reached the enemy immediate bargaining efforts are number one collective bargaining which means farmers bargaining together and farmers selling together towards the after contract contact contracts the milk holding action as a device to convince processors that they have to deal with NFO production and bargain collectively with the National Farmers Organization the marketing agency in common this influenced by the NFO members to control the variable in the fluid market both by absorbing unutilized production during the peak seasons as well as during the slow seasons on a bargaining basis with all of this it is still necessary for farmers to contract production with processors and sales groups through the National Farmers Organization bargaining efforts this in all is the collective bargaining program in action for the national farmers organization I thank you u.s. farm report as presented fair prices for dairy with Albin Rust head of the NFO national dairy commodity Department along with Oras Kanerva and dave Zeigeweid assistance in the NFO dairy commodity department members of the national farmers organization invite you to tune in again next week at the same time for more facts on Agriculture and Rural America which is a gear wheel in our economy that produces the majority of our nation's new wealth the national farmers organization the organization devoting its time efforts and resources to the preservation of the family farm structure and private enterprise in America