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Dairy cooperatives face July 1 deadline on CWT Monday, June 19, 2006
Agri News staff writer
Dairy cooperatives have until July 1 to decide if they will pay a dime assessment to belong to Cooperatives Working Together.
CWT, a voluntary self-help program started by the dairy industry in July 2003, offers herd retirement and export assistance programs in an effort to control the national milk supply and keep farm milk prices stable.
Participants were assessed a nickel per hundredweight when the program was introduced and that has raised about $60 million a year, said Christopher Galen, CWT spokesman. The money has been used to pay for three herd retirement programs -- one each year -- and several export assistance programs.
With increases in milk production and a downturn in milk prices, it's necessary to ask for more money.
"Basically more money is going to give us more resources to do more things," Galen said.
He estimates the 10-cent assessment will bring in about $120 million a year.
The 46 cooperatives participating in the program have contracts that run through Dec. 31. All but two pay a five-cent assessment per hundredweight. The two, Swiss Valley Farms and Manitowoc Milk Producers Cooperative, are partial contributors.
"We're hoping that everyone who signed up at the 5-cent level will invalidate the contract and sign up at the 10-cent level," Galen said.
The new contracts with the 10-cent assessment would run from July 2006 through Dec. 31, 2007.
After July 1, there will be three classes of membership, Galen said. There will be cooperatives at the 10-cent level, partial contributors and cooperatives who choose to fulfill the terms of their existing contract through December. In December, those cooperatives will either have to pay 10 cents per hundredweight when signing a new contract or pay nothing and not remain a part of CWT.
Now, 70 percent of the nation's milk is involved in the program.
Producers who sell to non-cooperatives or whose cooperatives do not belong to CWT may elect to be part of the program by asking their milk buyer to submit their assessment to CWT. Hundreds of producers do this, Galen said, and they will need to sign new contracts by July 1 to continue to participate.
The CWT program is unique, Galen said, as no other commodity has ever been able to come together to voluntarily control supply in hopes of boosting price. He fields calls from people around the globe who are interested in learning more about Cooperatives Working Together.
For more on CWT, go to www.cwt.coop |
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