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SW Wisconsin | Nobody knows anything. If we could get effective supply management then milk production could consistently match demand, and prices year over year would stabilize just above COP. If you want to complain about "but socialism!" let me ask you which is better: a passive system that automatically pays you a little extra when your production goes down and takes a little out of your check when it goes up, or an active system that requires a DC bureaucrat to decide that milk price dropped so you should get a check? It's a lot harder to figure out how to do supply management for other crops, but milk is produced year round and basically the same year to year (no switching between milk and beef, like you can switch between corn and beans).
Milk prices for 2021 will average between $8 and $40/cwt, but no telling what inflation is going to do, so by a year from now $40 might buy 100 lbs of milk or a gallon of gas and a slice of pizza.
I've offered my plan before, I'll say it again:
For every farm:
Current production is most recent 12 months.
Base production is the average of the three highest of the 4 12-month periods preceding that of current production.
Both base and current production are recalculated monthly, and are non-transferable. Farms without at least 4 years of production history are exempt.
For every 1% increase of current production over base production $0.05/cwt is deducted from the current month's milk check. For every 1% decrease $0.05/cwt is added to the current month's milk check.
Other reforms:
No PPD, all milk nationwide regardless of end product must be priced on the basis of Fat, Protein, Other Solids, and Skim.
Co-ops must be required to pay federal minimum prices.
No producer may be dropped except for consistent milk quality problems.
Processors can charge producers calculated hauling costs to the nearest available plant as of 2 years prior. (If the processor shuts down a plant and has to haul milk further that comes out of the processor's pocket for 2 years, but if they open up a plant closer the producer can subsidize that for 2 years, and thereafter will benefit from cheaper trucking.) | |
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Dairy forecast
