In a national teleconference Thursday hosted by the National Family Farm Coalition, local dairyman Joaquin Contente argued for a change in the milk pricing system amid what many in the industry are calling the worst crisis ever.
Contente said there are not enough buyers to have a true marketplace.
Contente said that a few processors -- he mentioned Kraft Foods, Leprino Foods and Dean Foods -- control the price.
For milk rolling off the dairy, the price has dropped from nearly $20 per 100 gallons last year to $10 -- a level milk producers say they won't be able to survive for long because it's so far below the cost of production.
Officials at Leprino Foods, which has two cheese-processing plants in Lemoore that employ 750 people, couldn't immediately be reached for comment.
Contente, who is president of the California Farmers Union, said the average dairy producer in California is losing $100,000 a month.
In a follow-up interview, Contente said the producer price has been especially volatile since President Ronald Reagan ended a so-called "parity" pricing scheme in 1981.
Under that scheme, the producer price was linked to the retail price, Contente said.
Since the parity system was scrapped, the price paid to milk producers has declined while consumer prices have increased, according to Patty Lovera, assistant director of Food and Water Watch, a consumer food safety organization.
To get prices at a level dairy operations can manage, Contente said he's in favor of a national pricing system that isn't tied to the futures market at the Chicago Mercantile Exchange -- the current method of pricing cheese and butter, the two commodities that account for more than half of the dairy market.
Contente and others believe the CME is being manipulated by the major cheese and butter makers.
But there is no consensus among dairy operators about what the problem is, let alone what should be done about it.
George Longfellow, who operates a 1,000 milk-cow dairy south of Hanford, said he doesn't particularly like the idea of a national supply management system to control prices.
Several producers, including Contente, have brought up the Canadian system, which controls prices by imposing rigorous quotas with severe penalties for producers that go over the limit.
"That pretty well locks you in," Longfellow said.
New producers can't get into the market under the Canadian model, Longfellow said, and he's not sure if it would work in the U.S.
But producers "can't stand" the price where it's at right now, he added.
"I don't know what the solution is," he said.
Longfellow supports a NFFC request to USDA to have the federal government immediately start buying milk at $17.54 per hundredweight, but he doesn't see "how that would ever happen."
The USDA support price is now $9.90 per hundredweight, which is far below cost of production.
Attempts to raise the support price in the past have run into serious opposition from cheese and butter makers.
Longfellow said he's in favor of action to lessen wild swings in milk prices, but wants to see details of any program before commenting on it too much.
"We're going to have to do something," he said.
The reporter can be reached at 583-2432Handord Sentinel
