July 9, 2018

Cooperative Calls For Government Price Floors On Dairy Products

 |  By: Anna-Lisa Laca

While low milk prices and trade war collide, AgriMark cooperative is asking the government to step in and boost milk prices.


The cooperative, representing 950 member farms in the Northeast, sent a letter to Agriculture Secretary Sonny Perdue asking him to implement price floors for butter, cheese and nonfat dry milk, according to Watertown Daily News.


The letter sought the following minimum wholesale prices: butter at $2.30, Cheddar cheese at $1.64 and nonfat dry milk at 81 cents.


In addition to the price floors, the cooperative is asking USDA to purchase cheese, butter and powder to be used in government programs at the requested wholesale prices.


 “If you do that and just announce it, the industry will probably move the prices back up itself,” said Agri-Mark economist Robert D. Wellington.


Wellington believes action from the government would also encourage private consumers to raise their offers. While the government might not need these products now, Wellington said the administration recently indicated it would be willing to pay higher prices when needed.


“The guy who wants to buy at $2.25 (per pound) is not going to get the butter unless he’s willing to buy it at $2.30” or more, he said.


Milk prices continue to feel tariff pain following the implementation of Chinese and Canadian tariffs last week. Despite Perdue’s promise to protect farmers from tariff pain, to date there has been no official word from USDA on details or timing of such help.