NFO-72 (AV10479) US Farm Report: Collective Bargaining for Dairymen

welcome to another edition of us farm report brought to you today an each week at this time by men of the national farmers organization in this TV viewing area in the interest of agriculture rural business and the well-being of our nation today's program Collective Bargaining for the dairyman is a discussion of the many factors involved in improving dairyman's bargaining and marketing power for a brighter and more secure future leading today's u.s. farm report discussion is willis raoul a farmer from Edgewood Iowa feel the collective bargaining for dairyman very good very good in a very timely topic today we've always maintained in the nfo from the very inception of of our collective bargaining program that the prices of hawk of farm commodities would have to be brought up and maintained and relative balance with each other to avoid the producers of one product from shifting to the predator to producing another product which in turn would just shift the problems in agriculture the dairyman I feel seemed to feel that our there a little bit on the bottom of the totem pole right now on this pricing situation we've seen some pretty significant successes of especially the meat producers the grain people are doing quite well this year for the holiday raymond have had some slight increase in the price of milk they do feel that is substandard compared to other products this is why we say that we feel this is quite timely to help with today's Midwest farm report on the far left Lawrence Hunsaker our dairy farmer from Buchanan County next Lawrence is right as Vernon Sommerfeld another dairyman from Buchanan County and on his right is Maynard Rafferty dairyman from power chic County Iowa all of these men certainly feel very keenly about the dairy industry and agriculture in general so we'll review a few of the dairyman's problems to begin with Lawrence I think you probably have some information on what has happened to the price of milk in the last twelve or fourteen years would you like to fill us in a little on this while the price of milk in the last 12 years or so has dropped tremendously and the price that we the consumer pays as went up to twenty five cents twenty four quart in your milk that we produce on the farm we get 12 cents of eight cents a quart actually and we've lost all grounds in our milk business as far as I I configure well we voice we've heard a lot of comment that in the past Lauren said these farmers would learn a little bit about producing quality milk that certainly this would be some great benefit have you people in the milk industry done anything in the last 10 or 12 years in the quality to improve the quality of this product well yes we went from the fellow says horse tank cooling to bulk tanks well first we went to can coolers and that wasn't satisfactory and we went moved on to bulk tank coolers with three four thousand dollar investment we went to pipeline milkers which is a tremendous investment some of us have went to Cal stalls and milking parlors and the likes of that which has always got an added investment to the farmer and to the producer and with relative no increase in our price at all do you have any method of maintaining these quality standards is there any type of inspection that sets the standards for you people well the government sets the state inspectors or your city inspectors as your milk orders would go set the standards which by which you must maintain to produce grade a milk and he recently no as of July this year this last year they come out with your grade B and inspect on that even so it looks to me as though there's gonna be a pretty high maintenance of quality you mentioned grainy and great female care Lawrence how can we differentiate between these two products what actually one is great a milk for and what is great be milk for it well you're great Emily all because the milk that goes in the bottle into the bottle for direct consumption well your manufactured milk or your great great be milk actually is what this processed into cheese and butter and the likes of that I see let's move over to Vernon now and see what he can tell us we hear a lot about the increased price of milk to the consumer while the farmers price level has been going down Vernon what what can you tell us about the marketing costs of milk what can you tell us about the cost of production well the marketing cost the milk is purely in the hands of the processor farmer receives approximately 8 cents on grade a milk today and summer is paying as Laura said about 24 to 25 cents per quart and I don't know why this big spread but it is well I I heard a lot about the price of milk had to go up to the consumer that marketing costs have risen but very low publicly has ever been said to my knowledge about the rising cost of production on the farm heavier production cost Vernon remains stable with fifteen years ago and they've gone down and it gone up what's happened to these production costs well they by no means remain stable they just keep going up and all prices have gone the other way that there's no way to stay whether to be in a dairy farmer you regardless of how efficient you get when prices are down your cow can't produce enough to stay with can you can you give us a few of your items cost items that have gone up when we heard production cost maybe some people don't understand exactly what our production costs out on the farm are what are some of the items involved in this well your milking equipment you've got all sorts of equipment around the farm and machinery hey making equipment harvesting equipment at all sorts all this is going up new and it repairs or tremendous anymore and your cooling tanks and milking equipment all is too don't seem to be a limit to what about the taxes on your land that used to produce the feed for these cows what's happens your tax bill sure no taxes and those taxes they've all gone up don't see any into it yet they tell us we're gonna get another increase in taxes this year I think this points out the fact Vernon that definitely when we talk about increasing the cost of milk to consumers that we also should consider the increased cost of production to the farmer Maynard can you fill us in a little bit on how milk is presently priced what kind of a pricing structure to you journeymen have to work under yes well it's the milk is presently floor the floor price for milk is guaranteed by the federal government through the Secretary of Agriculture who has the power to set the price of milk at 75 to 90 percent of parity and this has been at or near 75 percent in for a number of years in the recent past you have any idea of why the 75 percent figures is normally used well their criteria for setting this price is - and I can quote very closely as to guarantee a a plentiful supply of quality milk for the consuming public here in America and of course we've heard so much about surpluses and we have had a small surplus in milk for several years but just this past year this surplus has pretty much disappeared but the prices still is bouncing long after or very slightly above this floor price set by the Secretary of Agriculture now our co-ops were originally created 50 70 years ago for the purpose of collective bargaining and when they were first organized they were fairly successful at the getting a price for their member producers the farmers that were the members of them but as our economy has progressed and in recent years these coops have become relatively ineffectual in in getting a price that will be in balance with the rest of our economy to meet our cost of production I understand dr. Seaver an economist from the state of Connect Connecticut made some remarks concerning the farmers pricing their milk this might be of interest to their listeners can you comment on this Maynard yes dr. Seaver as an economist from Connecticut and he was a speaker at the recent National Farm Institute held at Des Moines Iowa and unless he he stated that probably what the farmer should do is joined together in commodity groups for the purpose of pricing their farm products and as he referred to this as collective bargaining which is what our NFL program is now he pointed out that that the power of the food chains and here I quote that at the growing power of the great food change to dictate prices and other conditions of the exchange of food which from the farmers on through to the consumer he said that that we should all of us in this country be concerned with this problem but in the final analysis we may be forced to depend upon regulatory acts to control the growing power at the retail level now in other words he pointed out that the chain stores have a tremendous power in this field then another point that he said he said their farmers would attempt to collective bargain he said that they would run in trouble with the Sherman anti-trust laws well well if it seems to me that he is just about in his research the point that NFL did in 1958 when nfo decided to look into collective bargaining for farmers they thought at that time that they needed a a law to permit this as they research this it's on it we have immunity as farmers from the Sherman Antitrust law through our capper-volstead Act of 1920 to this surplus situation that you mentioned a few minutes ago was quite interesting to be Maynard this has been promoted as the crux of all agricultural problems surplus products and even some people are saying that we had surplus farmers and you talked about two or three or possibly four percent of surplus of your commodity are you trying to tell me that you have a price discrimination on a hundred percent of your total production because you produced two percent more than the market needs any given date is this basically the situation well I believe that we have operated under a price that's based on the surplus in other words yes the price is based on a small part of the surplus and this is the price that we get paid for a hundred percent of our production this means and maybe two or three percent of your milk that the market doesn't need today price is a hundred percent of your production this is basically true yes let's talk a little bit of now about the investment in the dairy business we'll go back to Lawrence for a minute and large what can you tell us about the investment what kind of investment do you dairy people have who invests in the marketing structure your cooperative marketing structure well your producer does the biggest percent of investing in your cooperative he's got the cows and he's got the equipment to operate this dairy set up and he he has the biggest investment by far in the dairy industry you mean your your producer invested in the land he invested in the cows and then he is also carrying the best investment of the cooperative marketing structure is this right well he does yes in the coop he's got a deduct a a what they call our rethought our revolving fund which is actually paying for the operation of the plant we've established a little bit here at all about the dairyman's problems is caused by the method the present method of pricing milk Vernon what do you think might be the answer to the dairyman's present price dilemma well I think you're gonna have to have a organization that can ask for a price and receive it such as nfo collective bargaining it's about the only way out so you keep a cost of production post a reasonable return and ride-rite worthless raising cost in producing would you like to may not add anything to this these comments what are we going to do about this situation what are you people as dairyman going to do a lot of I should say well I think it's it's extremely important that we as dairy farmers and it's all farmers with their respective commodities that we take hold of this problem and solve it ourselves if you want a job done and you want to get the job done right the only way to do is do it yourself you know a lot of people complain about the government controlled agriculture and I think this is a serious problem and it's becoming more so but this is our own fault by our irresponsibility in taking care of our own businesses farmers the business is pricing our product and until we do this we are inevitably going to drift more and more to federally controlled agriculture I'd like to visit with you people a few minutes just about the area phone in general colors got the spy law spotlight on the dairyman today I don't think we should ignore the producer producers of all other farm commodities what is the nfo actually amount to well we talk about collective bargaining when we talk about master contracts when we talk about membership agreements people really the airport program is only a method of selling on a nationwide or a national basis this has been the need for this has been brought about certainly due to the growth of your food chain stores it on the retail end of our markets they have put us in a most helpless position as far as any bargaining power as far as having any voice in the pricing of farm products individually we just cannot compete on any kind of a basis with nationwide buyers this basically is the NFL program put together enough of the total production on a nationwide basis so that the buyers of farm commodities just can't fill their needs from any other sources at this point they will come to the nfo they will sign our master contracts and then we will be in a position to bargain together to sell together and to price our products together we've seen some great strides in collective bargaining in the last year soul the dairyman perhaps has left a little bit behind but not certainly not totally the meat people I think of maybe the best progress we've seen some real substantial substantial increases in the price of cattle and we've seen some almost spectacular increases in the price of live hogs in the file this was due of course to the NFL marketing arrangements that spectacular rise in the price of hogs and the rise in the price of beef cattle our meat producers have learned how to bargain together and they've learned how to sell together and certainly the results are just outstanding and certainly they're noticeable when we find that according to the USDA figures that farm income has gone up two billion dollars in 1965 over 1964 do basically to the increase in the price of live livestock sold from the farms and of course no state gets the benefit from these kind of prices and price increases like the state of Iowa because we are the basic agricultural state of our union so this is the nfo program they put together enough of the total production so that we are in a position to bargain for it and bargain on a national level to compete with the chain stores because they buy on a national level one I don't think we can stress this too much when we see buyers and farm commodities at stake just possibly at every sized green processor that needs five to six Bush thousand bushels per hour to keep his operation running are we as individuals ever going to be able to get large enough to compete with a fire like this I get around quite a lot of the eastern half a while over a period of a few months and I see some people maybe with 15 or 20 or 25,000 bushels of corn on their farm and this is a good operation for a individual farmer but then I stop and think this would operate a processing plant four to five hours is he really interested in this man is an individual if we put together a lot of individuals like this so that we can talk to this man in terms of enough supply to operate his processing plant for a lot of hours or maybe several weeks at a time I'm sure that this is going to put us in a much much stronger bargaining position and the meat boys have proved this they've done a whale on the job so I think it's time for the dairyman this is why the spotlight is on Derry today it's time for the dairyman to get with it and and do something about pricing his milk you haven't been left out of this meat enticing structure completely bursting with dairyman I find that your veal cancer was dr. Lewton forty to forty four dollars one hundred compared with maybe twenty-five or twenty-six dollars one hundred a year ago this is a good increase your market cows your cull cows from your dairy herds I see them selling the better cows from sixteen to eighteen cents a pound and I can remember just a short 16 or 18 months ago that many of them were bringing eight an eight and a half or nine cents a pound so without question you ever try some benefits but you still got some work to do on your milk and after all this is what your Melton cows for basically is a milk you produce I'd like to go back around the table one more time see if these men that are actively engaged in milking these cows have any more to say about this lords can you anything to this at all well the only thing I can add to this is that the dairy farmers definitely must organize and establish prices and they definitely must work towards collective bargaining for agriculture for the dairy farmer and for whole agriculture as a whole or they're gonna be in bad way well they you think they just might stay on the bottom end of this totem pole if they don't get themselves organized work out a method of bargaining and selling together just because of your opinion yes actually the family size for armor will as near as I can see go clear out of the picture if if they don't cooped themselves together and and do more bargaining I'm more collective bargaining and unorganized Vernon what would you like to add about dairy farmers what they might do about the pricing of their milk cow milk products well they could farm form form but put a little pressure on the mark and market by possibly selling as a group their coops could do such a thing as that of a pressure on the marketing system that way there's a number of things probably could be done they'll just do it Maynard you probably have some more ideas about collective bargaining for farmers the nfo program in general would you like to add something to what these boys have already said well of course nfo as inactive in the three basic commodities of meat and grain and milk and we have realized from the start that we've got to raise these prices together in balance we cannot get a good price for one come on then neglect the others there's this we are working on with our activities in in meat marketing arrangements and our activities and grain marketing arrangements and our activities in dairy to get these coops into master contracts and that this is what these milk co-ops need the most they are the weakest in cooperation among coops the price for their farmer members let's say were originally created to do now we we have been accused of being anti co-op as nfo but nothing could be farther from the truth because n fo OS is Pro co-op we are very much in favor of the co-operative movement and our program meets the most dire need that the milk coops have today and we can be of great assistance to these coops who well cooperate with us and so I would again urge those farmers our members of coops that have not yet signed master mil contracts at the nfo - to take a look at this seriously considerate this is for their benefit as individual farmers at this or the benefit of their milk co-op it can mean their survival or their their discontinuance and farming and it can mean the same thing for the coop which they remember I think Maynard brought out an interesting point about our cooperative marketing structure as they stand now of course he mentioned earlier in the program a number of years ago this was quite effective as a bargaining tool for farmers until we saw the buying end of our industry them together in larger groups our coops have remained somewhat separated operating individually actually competing with each other for the farmers supply of milk I don't think this was the original intent of the co-operative movement they have been allowed by law for many many years to band together to unite farmers bargaining power rather than to to divide farmers bargaining power and this of course is what the nfo has urged constantly let's get our cooperative marketing structure together so that we do have a totally united bargaining structure for the farmers milk products now let's take a lesson here the dairyman I was from the meat producers primarily because they have shown the greatest success in bargaining at this point what are some of the steps that must be taken in order to bargain effectively for your products number one of course is to sign an nfo membership agreement as an individual daringly this is a first step we must all take this is the structure of the nfo this is a foundation of it and a very necessary foundation of after this is done then you're in a position to go to your local buyer handler whether it's cooperative or independent milk handler and urge him to be a part of the NFL program by signing one of our master contracts for milk this is a second step at this point you're in a position to bargain together you're in a position to sell together and then the next and final step you will be in a position to price your products together this coupled with managing any surplus production that might exist to develop is the steps that will have to be taken for successful bargaining I have a reprint here from the Wichita Eagle or the yes Eagle and Beacon newspaper from Wichita Kansas and it has this to say about the nf whole perhaps the most spectacular development in farm marketing in the history of tilling land has been the 10-year growth of the national farmers organization if not only can work but it is working farmers for a healthy and stable farm economy joined the nfo remember everyone will join and support the nfo just as soon as they understand it the national farmers organization is an organization dedicated to raising and stabilizing farm prices through collective bargaining farmers help improve your bargaining color by selling all of your grain and livestock through the new nfo marketing and livestock arrangements and in position grain sales that have been set up in your area tune in again next week at the same time for another edition of us farm report a weekly program that delves into the many vital issues affecting American agriculture today u.s. farm report a rural area public relations program is 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 TV viewing area for more information on the national farmers organization contact the county organization in your county or write to nfo corning Iowa farmers remember collective bargaining as the key to farmers success join the nfo today