Saturday, January 8, 2011


National Milk Producers Federation (NMPF) is pushing hard for its Foundations for the Future (FFTF) program. Colin Peterson is their guy in congress who will make this happen.

NMPF plans to have legislation introduced in the spring.

At this point, the plan seems to be an effort to make certain nothing significant happens. That is probably the exciting part to Peterson. There is no change is price discovery, the insurance program is really all it boils down to. With no change in the power of the CME, why should the "market" give a decent price. However, it is not likely the additional insurance coverage will be as cheap as man may think once the payment to farmers becomes habitual.

Many details are yet to be revealed like other programs roping in dairy farmers. But, Kozak is determined to move full speed ahead.

The sad part is there is an obligation for those at the top to do more. Maybe this is just a mirror image of those on the bottom thinking someone else should do something about their low milk checks. The con game flourishes on few details and much ignorance.


  1. John,
    Dairy farmers best wake-up to the threat this bad business of Peterson and Kozak represents! If something doesn't defer FFTF, farmers are going to wind up with a worthless insurance scheme rather than a price.
    In my correspondence with folks in Washington I sense they are not thrilled with FFTF and would very much like to find something better.Something better would be scrapping the CME price nonsense and coming up with a viable pricing alternative.
    Farmers must make their thoughts known and convince Washington the National Milk Producers Federation DOES NOT represent America's dairy farmers! GET BUSY!! RAISE HELL!! Nate Wilson.

  2. Brothers beware FFTF is the greatest example of false leadership I have seen in my very lengthy career! None of you farmers understand what this proposal will change, what we have now is broke FFTF is vile it will severely steel class I revenues and convert our milk price from fluid to world manufacturing. No Dairymen will win if this plan is implemented. All yes for you believers ask NMPF what the min price, min bf or min protein values will be calculated? They won't, no min prices or values!! Once there was no season or limit on buffalo!! Hey the Jews thought they were going to get a well needed shower!!

  3. John,
    With all due respect, you are far too negitive about Foundations for the Future. The Margin Insurance program is the safety net portion and it will be a vast improvement on the current safety net which consists of the support price program and the MILC program. The new Margin program will only work and be affordable if it is coupled with a market management program that has the ability to adjust the milk supply. Foundations for the Future includes a market management program with teeth. The third piece of Foundations for the Future is moving to a competitive pay price system for class III. This is the piece that is designed to get us to better price discovery. It is critical for the industry to understand that just getting rid of a government sanctioned end product pricing formula, which is what the current class III price formula is, is no guarentee that we will be divorced from the CME. In fact, Idaho is currently unregulated by anyone and yet the proprietary cheese plants there have dictated to their farmers that they will be paid directly off of the CME. What is needed once the government no longer regulates the minimum class III price is for cooperatives who negotiate with the Krafts, and Leprinos of this industry to design an alternative milk pricing formula that does not depend on the CME. One other point to remember, when the FMMO class III ceases to exist, there will be no more Class III futures contract to trade at the CME. That fact, in and of itself, may do the most to stop the stupid CME cash market behavior we have witnessed over the past couple of years.
    Foundations for the Future is the best chance we have to make fundamental change in this industry in the near term.
    Stay hopeful my friend.
    Geoffrey Vanden Heuvel

  4. Let's examine how insurance works. First the plan is written in complicated legal jumbo and every year there will be changes we don't understand and will have to go to meetings to hear what someone thinks the policy means. You never know how it actually works till you have to use it and then they have you. Of, course, the premium will rise every year because you never heard of a poor insurance agent or company, and then they'll probably make it mandatory or you will be punished somehow. Your agent will probably send you last minute paperwork and you will be expected to understand their latin and get figures for them immediately upon receiving their request, ignoring the fact that we are already overworked to the point of exhaustion.And Oh, yes and did I mention the fact that you may even get a bill years later saying a mistake was made and you were undercharged. You can make phone calls and even talk to your government representatives inquiring how that can happen when you don't have a mutual insurance company- but they solve that by ignoring the whole situation, and the state insurance agency doesn't return phone calls. Have a claim and it may take more than a year to get paid, even though the policy states otherwise. Sharpen up on your legal jumbo because you'll be the only one who cares if your getting paid what you were promised. Welcome to insurance in Pa. If you think insurance is the answer you can't be sane!

  5. Anyone have good experience with LGMI? Seems legitimate. Maybe I missed the discussion on this one.

    FFTF - what happens to the extra milk I ship when milk price to feed ratio drops and supply controls kick in? I vote yes only if that milk is dumped. If it ends up at the plant, unpaid to me, forget it. Someone please explain how I am misunderstanding this.

    Geoffry - I agree CME cash is ridiculous. Seems like a much greater incentive to sell there, than buy.. ergo. Instead, why not have the plants report prices daily? (like hogs). How hard is it to hit "send" at the end of the day? Audit those prices, get rid of the cash market overnight.

    Supply managment = no risk. No risk = no profit. For some, that may be fine.

    No futures market = no price discovery. Do we really want our coops negotiating with Kraft? I personally like taking advantage of higher milk prices on the horizon.

    2 years of high milk prices easily ends in 2 years of low prices. Milk supply is right now headed back to its long term (30yr) trajectory of +1% supply offset by +1% demand. 2011 is shaping up pretty nicely as we speak. Manufacturers realize the CCC program isn't happening, they are already creating new products un-supported by .gov The sky is the limit going forward. Industries evolve on a global scale. New formulas might be necessary, but thats one area thats over my head.

    I know things get heated on this forum, this is just my opinion, AND I MAY VERY WELL BE WRONG. I appreciate feedback. Can't quite find the answers to some of my questions above. For now, LGMI looks good 2nd half 2011 and so do futures. Time to start scaling in.

    Thanks, Dave

  6. Where oh where to begin? OK--How about here---

    " What is needed once the government no longer regulates the minimum class III price is for cooperatives who negotiate with the Krafts, and Leprinos of this industry to design an alternative milk pricing formula that does not depend on the CME."

    Pause while the hysterical convulsions subside...............................

    I have become privy to some discussion on this piece of stinky cheese..for example...

    Kozak also said: “Frank Lucas does not have, and has not been, actively engaged in dairy policy. Oklahoma does not have many milk producers and some of the ways we are organized in vertical integration are not as familiar to him.”

    VERTICAL INTEGRATION--hogs,chickens,turkeys now coming to dairy.

    "Kozak is “very optimistic” about endorsement by AFB… they are considering it."

    Of course--more insurance sales opportunities

    Kozak said: “This is a national program – constructed to be national. Yes, it has different ramifications in regions… But we are not looking at that. We are moving forward on a national basis and that is what Congress is looking for. That is how we got their commitment to move it forward because we are going to minimalize regionalism.”

    Translation--anyone east of the Mississippi is gonna get screwed.

    Vandenheuval said: “We can’t endorse it Until we see legislative text – we need to see that.”

    Vandeheuval asked at what point will the Bill become “public domain” or at what point will it be released to dairy organizations around the country so they can decide whether to give the endorsement you are looking for?

    Kozak’s response was this: “I Guess that will be dependent on the signal we get from Chairman Lucas and Collin Peterson. I have to get direction from them… I never want to be in front of the chairman.


    Kozak said… “We are insisting there be little rulemaking or administration by USDA so we are being very specific in the legislative language (all the more reason to read it). That means it can be implemented quickly because dairy farmers need it right now.”


    Kozak insisted: “There isn’t two parts to FFTF – The fed milk order piece is an inherent part of FFTF – We are just taking one extra month difference to get the other three pieces up on Capitol Hill awhile and then we will get the Fed Order piece up there. We are trying to do this as efficient as we can and get the other piece up there in March to catch up with it.”

    Can you say OBAMACARE?

    Friends, in my 35 years in the barn, every plan that is gonna "fix dairy" (and there have been many) have two common elements

    1) some sort of per cwt assessment (insurance premium if you will) and
    2)total disregard of what the "boots in the shit" dairyman think.

    Even this new whiz-bang "national producers org" in their daily conference call/infomercials push one thing--supply management and producer assessments........blah blah blah.

    Until you see a plan that states: "This plan has the John Bunting seal of approval" throw it out with the rest of the shit. We know the powers read this blog every day and yet the phone never rings with "will you help us get this mess fixed?"

    Yes, Virginia, there are bloodsuckers out there and the ones with the biggest lips are Jerry Kozak and the NMPF!


  7. Rusty,

    What is the answer? What does the JB community propose for congress? What are your recommendations?

    All I see on this forum is B****ing under these policy related topics. Please point me to John's post where he outlines specific changes and how it will work.

    Thank you,

  8. Dave, If you have ever read The Milkweed, there are proposed solutions and ideas offered on what needs to be done. Stop trying to minimize this forum by saying that we are ONLY bitching.

    A group of farmers has made a start in changing what is ILLEGAL. Too bad discovery was not made public and I cannot wait until May. We are doing far more than bitching, I promise you.

  9. Dear Dave. Is this your new assignment? Congress does'nt givre a shit about farmers cause the farmers can't line their pockets like NMPF and the other cooperative and processor lobbies. At what point does ANYONE actually believe that Kozack and his crooked cronies have any empathy whatsoever for farmers? If NMPF is for it you can bet your ass farmers are the losers.

  10. Dave

    If you had read this blog for any length of time you would find a recurring theme-THE DAIRY INDUSTRY IS CONTROLLED BY A BUNCH OF CROOKS AND LIARS!

    1) NO USDA oversight
    2) NO FDA oversight
    3) NO Dept of Justice oversight.
    4) NO CFTC oversight

    THE PROBLEM IS ZERO ENFORCEMENT OF EXISTING LAWS! At this point, IMO, there is no need for ANY new dairy legislation until the existing laws are followed.

    Don't come to me whining about the need for supply management when you can't even give me exact numbers on the true supply. Every truckload hits the scales every day. Add 'em up. NO MORE GUESSTIMATES!

    Don't tell me all things are well with a 14.2lb/cwt cheese yield in California. What would the milk price be if CA cheese plants needed 40% more raw milk to produce the same amount of cheese?

    Don't tell me that Jerome sells on the exchange cause they can't find a buyer on their own--QUIT MAKING INEDIBLE MPC LADEN SHIT AND MAYBE (besides Kraft) SOMEONE WILL BUY IT!

    Don't tell me that there is any kind of competitive market relationship between DFA/DEAN/DMS/LEPRINO/KRAFT/CALIFORNIA DAIRIES/DAIRY AMERICA/FONTERRA/LAND-O-LAKES/etc/ad infinitum. They are all so far up each others ass you need to tie a rope to their feet.

    There's your homework, Dave. Figure out how to fix the lax oversight and get back to me.


  11. Thank you... I will check out milkweed once it is back up.

    And there's no assignment here. Speculate all you want. Personally, I blame the last 2 years on banks and CONgress. There's more incest between them than a caveman society. What happened in Europe is coming here. Its impossible to say when. But lending will not return until all the bad paper is out in the open. CONgress doesn't care about long term policy and any good change to policy is virtually impossible to achieve (for obvious reasons you noted above).

    Here's a question... why has there only been a handful of dairies foreclosed on in the last 2 years? Do you think banks have anything to do with that??? We should have seen a huge correction in supply heading into 2010. It doesn't matter what the mechanism for price discovery is, without a natural correction in supply due to s**t prices, the only 'discovery' will be another jar of vasoline.


  12. Dave, The thing I have heard John Bunting state repeatedly is the solution to a viable milk price in this country will take much DISCUSSION.I personally think thats why he started this blog,the land grant U most efficent model of milk production will change with $7 corn and $5 fuel.How many cows does it take to pay for your health ins. Dave? Would local milk for New England produced on hillside pastures unfit for cultivation be better for our Country or shall we have Ken Baily bring it east from New Mexico? Much Discussion!Thats what I like about BUNTING and his family and his blog! Wake up none of those people designing FFTF give a rats ass about folks with cow shit on their shoes!

  13. What has become most evident to me from John's blog, his commenters, the Milkweed, and my own research is that there are enough laws that can help farmers already on the books, but there is no oversight and no enforcement other than rhetoric. The outragious antics at the CME, the traders in complete control,the acceptance as truth what the processors report to USDA, the California NFDM debacle, and the list goes on and on. When one trader can sell 45 loads of cheese in one day and one buyer buys the majority of those loads, and they BOTH have to pay CME for the trades, what was keeping them from selling direct? Direct has no bearing on the milk price. Also another blogger mentioned the California cheese yield, and how 14.2 lbs yield raises no eyebrows at CDFA. Never in the history of milk has the cheese yield been 14.2 lbs using legal ingredients but nary a word uttered from CDFA. Do the CDFA people whose JOB it is to have oversight even blink when this bell goes off? Even an undereducated oaf like me can see there is something wrong with this picture so who is in charge of this nuthouse?

  14. Hey poor Dave has had enough,this will soon resemble water boarding! Let's take this enforcement discussion forward. There is no better little nonpreforming troll to blame then the famous SunShine himself William Newell he's the USDA guy responsible for competition and fair marketing. Yes Virginia William to believes all is well and the country could lose ah say 20,000 dairy farms! Good thing USDA has don't ask to perform or tell to perform! No Mr. Government Man going to save our future, a threat to vote the orders out would have DC shitting down both legs!! Hey Dave I bet John has tried Discussing things with Sunshine you should try it!

  15. In addition to the law suits against the coops the farmers should band together to sue the government for not enforcing regulations created to protect us.

    Talk about a class action....

  16. Love the discussion--Keep it coming! Be aware friends, there are some well connected folks posting on here that know a lot more than they tell.



    P.S. to 5:17pm--google "writ of mandamus"

  17. Rusty & Skip,

    Thanks for the comments. Let me think this through a bit. I've been stuck on congress and banks for 2 years now, and never looked at it from that perspective. Check back on this thread in a day or 2. There is an answer, lets put something together and get all dairyman behind it. I don't know how many hits this blog see's in a month, but its time to figure something out.

    I haven't read the milkweed yet, so forgive me for being slightly behind.


  18. Here's an Idea. Scrap the FMMO's and all the classes just trade milk on the CME with daily cash reporting. Audited by somebody with teeth and guts! I say scrap capper volstadt to it's not like anybody even knows how to use it. And while were throwing out the old get rid of CWT, NMPF and DMI. The corn farmer doesn't get his check cut to him based on outdated modes of accounting based on wierd formulas of usage! He sells corn and Golman Sucks can buy a futures contract on the CBOT and sell it to cargill or podunk USA feed mil. WHo cares at that point? Why won't it work? Cause then COops will have to actually make money selling a product consumers want. ALso the big processors will have more competition for their market which means at least more light if not more honesty. And lastly Jerry Kozak and bob stallman won't have anybody to blow smoke up! But instead we'll just get raped again by stupid and his stooges!

  19. John,
    I can't recall one of your blogs ever generating this sort of response before. If this crisis ever comes to success for farmers it will come from a comprehensive solution. There will be no "magic bullet." Here's my thoughts on the subject...

    #1;The Justice Dept.and Congress must get actively involved in USDA upholding dairy product integrity standards.

    #2;The CME Cheddar pricing scheme must be replaced by a price structure that includes a regional cost of production factor and a factor linked to the retail price of dairy products as well as processor input.

    #3;The implementation of a well reasoned supply management scheme.

    There will be no fix until Congress and Justice compel USDA to observe and live by its own rules. No matter what Congress enacts there will be no compliance until the current rules are enforced. We heard much last spring about Justice being ready to kick ass on these rules. So far the Obama Justice Dept. has been no more effective than the Bush Justice Dept.

    The pricing issue could be addressed with a new price structure similar to the Ohio Farmer's Union Plan that was dismissed out of hand back in 2007. I think John dedicated a blog to the OFU Plan some time ago. It might be a good idea to re-run it to refresh everyone's memory. Some people of influence in Washington are supposedly giving the OFU Plan some serious consideration. This might be something to be supported and re-enforced.

    No pricing scheme, no matter how well thought out, nor any enforcement of rules, no matter how stringent, will bring relief if U.S. dairymen are stupid enough to over produce the market. If dairymen want a price they will have self-regulate. Somehow farmers will have to hash-out and live with some sort of supply management scheme.

    There you have it, a comprehensive solution; the Devil's in the details!

    Nate Wilson.

  20. Broken system!! Closed on sale of our farm lasst week. Very emotional, lots of tears!! Now I can't get the smile off my face, no debt, no job yet, no heart burn, blood pressure down, no worry about weather, forget about CME,life goes on and it feels good!! No more Tylenol PM either, God bless all of ya still in it!

  21. Thanks John Bunting and all of you who share the outrage. Welcome to the farm Dave.