A pair of Hoard's West articles titled "California's pricing system is killing its dairies" were the center of a discussion initiated by a longtime California dairy industry leader. In this man's opinion, those two articles which interviewed Chino, Calif., dairyman Geoffrey Vanden Heuvel and Hilmar Cheese Company's John Jeter clearly defined the issues facing the state's dairy industry. At first, we thanked him for the compliment, but then he insisted . . . if anyone wants to understand the California pricing issues, they must read those two articles.
That being said, we are taking him up on his suggestion and posting both articles authored by Dennis Halladay, our Hoard's Dairyman Western Editor, to our website at the following Dairy E-Source link: http://hoards.com/E_dairy-policy
In the first article, which appeared in the April 25 Hoard's West, Vanden Heuvel, who operates a 1,250-cow dairy in Chino, Calif., presented a fiercely passionate commentary about California's present state of dairying. "What is happening in the California dairy industry right now reminds me of when I went to Niagara Falls," said the dairyman who has been extremely active in dairy policy for 28 years.
"About a mile upstream is a sign that says, ‘Point of no return.' It means if you are in the water at that point they can't save you," he said. "I think that is where about 25 percent of our dairies are now - they are still in business, but they are going to go over the falls and they can't be saved," he explained.
As for the future, "This problem will get fixed. There is no doubt in my mind that there will come a day when California milk processors will be paying a competitive price for milk," said Vanden Heuvel. "The question is, how many causalities will happen and how much damage will be done between now and then?"
Those thoughts provoked a follow-up article in the June issue of Hoard's West with a different point of view on the same subject. John Jeter, longtime CEO and President of Hilmar Cheese Company, believes the reason for California's milk pricing woes isn't low prices but the system itself.
"We believe the dairy industry and dairymen would be much more healthy if regulated price was not there; that instead of going to the regulated system they went back to their co-op and said, ‘We need to invest. We need to be like Fonterra or Arla Foods.' There is no reason that U.S. entities can't be like them," said Hilmar's first and only cheese company CEO.
"We need a market solution today, not a regulated solution," Jeter stated. "In this global dairy industry that we are in, if you have to go to a secretary of agriculture or a legislature, then we have problems. And we do. We should be tough enough marketers, be innovative enough, and be good enough investors to invest in this tremendous raw material that we have - not go to a secretary of agriculture who can't create value," Jeter explained.
If you follow milk pricing, both articles are a must read. Go to http://hoards.com/E_dairy-policy for more Hoard's Dairyman Intel.
