Thursday, September 16, 2010

Dairy Cooperatives

(Click on image to enlarge)

The latest California NFDM price (September 10, 10) IS $1.0851 per pound. California drives NFDM price because, or maybe because, a lot of NFDM is made there.

But, the California NFDM price makes no sense. Why, when all other dairy product prices are rising, should NFDM prices fall? The NFDM made in California is made by cooperatives. Capper-Volstead only exempts co-ops from antitrust action provided the operate for the mutual benefit of members.

State law is the basis for most co-op rules. California's lae begins:

Agricultural Marketing Associations
SECTION 14550-14551

14550. In order to promote, foster, and encourage the intelligent and orderly marketing of agricultural products through cooperation;to eliminate speculation and waste; to make the distribution of agricultural products between producer and consumer as direct as can be efficiently done; and to stabilize the marketing of agricultural products, this act is passed.

14551. It is here recognized that agriculture is characterized by individual production in contrast to the group or factory system that characterizes other forms of industrial production; and that the ordinary form of corporate organization permits industrial groups to combine for the purpose of group production and the ensuing group marketing; and that the public has an interest in permitting farmers
to bring their industry to the high degree of efficiency and merchandising skill evidenced in the manufacturing industries; and that the public interest urgently needs to prevent the migration from the farm to the city in order to keep up farm production and to preserve the agricultural supply of the nation; and that the public
interest demands that the farmer be encouraged to attain a superior and more direct system of marketing in the substitution of merchandising for the blind, unscientific, and speculative selling of crops.

Someone must have oversight of cooperatives in California.

Within the Federal Orders, the task of oversight is the responsibility of one person:

Order Operations
William Newell, Branch Chief
Phone: 202-720-3869
Fax: 202-720-2454

Some might want to know what exactly he does is his oversight role? Would there be as many dairy lawsuits if actual oversight had been conducted?


  1. This is what drives the California milk prices and CDFA apparently is in bed with their darling Dairy America and the coops that run it. If you look back at previous months of this year you can predict what's going to happen toward the end of the month by the higher price and lower volume at the beginning of the month. If the price was $1.25 at the beginning of the month at 6 million pounds you can bet there will be a week toward the end of the month at $1.10 and 25 million pounds to establish the average.

  2. Mr. sunshine wouldn't do anything. He thinks as long as the US has enough fluid milk that we should import the rest.