A2O-Lancaster Farming, Saturday, October 31, 1992 JOYCE BUPP York Co. Correspondent GETTYSBURG (Adams Coun ty) “We can get anything out of the government we want - as long as we’re willing to pay for it.” That was the message from president Fred G. Butler, Sr., to members attending the Middle Atlantic Division of Dairymen, Inc.’s annual meeting, October 23 at the Ramada Inn. The division headquarters are in Sykesville, Maryland, with Dairymen corpo rate offices in Louisville, Kentucky. Butler reviewed recent drama tic increases in dairy productivity, with the average production per cow having increased by about 5 percent in the last year, compared to more usual annuals increase of 1.5 percent. The effect of these production increases on future milk prices partially hinges on predictions Secretary of Agriculture Madigan must make under the present 1990 Farm Bill legislation. If the Sec retary’s predictions are for an esti mated 5 billion pounds of produc tion over commercial needs, the milk support price would drop 50-cents. But if he estimates pro duction at 7 billion pounds more than commercial needs, a mandat ory supply-management program would be implemented. ‘This would probably be in the form of increased assessments,” Butler said, adding, “I hope the Secretary will be kind to us and his prediction will not be over 5 billion pounds.” Butler noted that some Midwest dairy producers want a dollar increase in the present support price, from $lO.lO to $ll.lO. While Congress could accept such a proposal, it would predictably trigger additional assessments, perhaps as much as an additional 20 to 25-cents beyond the current 13-1/2-cent per hundredweight assessment. “Our only hope would be that Congress would admit that the present 13-1/2-cent assessment dairy farmers are paying is much more than is necessary to finance the over-production of today,” Buder said. Management reports to produc ers likewise repeatedly empha sized that dairy producers must look within their own industry - and not to Washington, D.C. - for long-term improved market stabil ity and profitability. James McDowell, Jr., chief executive officer of Dairymen, Inc., said producers need only two things from the government. “We need a support price prog ram, not a guaranteed market for all milk, and we need to maintain the Federal Order system for the orderly marketing of milk,” McDowell believes. He reminded Dairy producers that, as numbers of raw milk buy ers and retailers of milk diminish, those remaining yield increasing market power. McDowell cited milk selling for 58-cents per gal lon and bread for 9-cent per loaf in one Southern food retailing price war as an example of strategics used to increase market share. McDowell advised that, through their organizations, pro ducers increasingly working together through joint ventures, strategic alliances and marketing agencies to deal with changing and larger buyers. “Producers must get stronger if we are to succeed,” he said. “Pro ducers must have some sort of equal power to deal with the mark et place.” Dairymen Told: “Don’t Look To Government” Briefly reviewing the coopera tive’s financial status, McDowell told Dairymen members that some S4O million in expenses have been cut in the last four years, debt reduced by $2O million, and inter est cut in half due to debt paydown and reduced rates. More than 97-cents of every dollar of monies collected by the cooperative in the 1992 fiscal year has been returned to members. Addressing the anti-trust suits in which Dairymen’s processing subsidiary and numerous other dairy processors serving school business have been involved, McDowell said the “nightmare we inherited” is almost totally behind the cooperative. He predicted that ongoing investigations of school milk bid-rigging by dozens of pro cessors in more than 30 states could result in up to $l5O million in fines. Division manager Boyd M. Cook reported profitability in the division’s supply and hauling divisions, despite increases in both workmen’s compensation and vehicle insurances. He com mended members for their adher ence to shipping quality milk, not ing that only three antibiotic positive loads were dumped through the first nine months of 1992. Members have responded to Dairymen programs to encourage milk production in the fall months. Cook said. Both Fall Incentive and Volume Incentive programs will continue, with some fine-tuning adjustments. Two major problems cited by Cook as having impacted Dairy men this year were the final resol ution of the anti-trust settlements and the inability to maintain adequate margins in fluid processing. Legal settlements will be writ ten off, at the rate of about five cents per hundredweight, against net margin patronage previously allocated from 1984-88, when the alleged violations occurred. Cook re-emphasized the need for dairy farmer unity in order to gain a fair share of the consumer dollar, including over-order pre miums that have been negotiated in Federal Order 4 by the Middle AUantic Cooperative Milk Mark eting Agency (MACMMA). MACMMA is comprised of the Dairymen Middle AUantic divi sion, Atlantic Dairy Cooperative and Maryland and Virginia Milk Producers. SYRACUSE. N.Y. Several thousand farmer-members of Agway met at the New York State Fairgrounds in Syracuse October 29 and 30 to take part in the 28th Agway annual meeting of the farm supply, energy, and food market ing cooperative. Charles F. Saul, Agway presi dent and CEO since February, reported the past 10 months of calendar 1992 have been a period of intensive study to determine more clearly where Agway stands in relation to its markets and what the 91,000-member Northeast farm cooperative must do to posi tion itself to compete more effec tively the rest of this decade and into the next century. "Many changes are taking place on Northeast farms, in rural com munities, and in the businesses serving farmers and other rural customers. Fewer farmers each year are working larger farms with bigger herds, and they require more specialized and technical ser- yBHv “All processors are willing to pay a fair and reasonable price for Class I milk to keep local fanners in business, but they must be assured they are not put into an unfair competitive situation by having competitors purchase their milk supply at a lower price,” he warned. “MACMMA can current ly go a long way toward this guar antee, but small blocks of unregu lated, non-co-op member milk can, and is, playing havoc with MACMMA’s ability to generate fair prices.” Mary and Kenlin Martin, Smithsburg, Maryland, have been selected as the Middle Atlantic Division’s 1992-93 Young Dairy men couple and will represent the division at corporate Young Dairymen activities. The Martins milk 55 registered Holsteins, with a herd average of 22,900 milk. Merchandising plays a large role in their farm business, including embryo transplant sales and participation in regional shows and sales. Mary and Kenlin have three children and the family is active in agriculture, communi ty and church leadership. Seven electees were ratified by the membership to serve on the division’s board of directors. Elected were B. David Patrick, Woodbine, Maryland, District 2; Myron L. Wilhide, Detour, Mary land, District 3; Robert L. Grove, Greencaslle and Terry Martin, District 8; Crawford R. Galt, Chestertown, Maryland, District 9; H. Bailey Herring, Farmington, District 11; and Leon Kline, New manstown. District 14. Three retiring directors were recognized for their service on the division board. Retiring from the board are Claude Cooper, New Freedom, District 7; Marlin E. Martin, Smithsburg, Maryland, District 12; and Gene Kilby, Peach Bottom, District 14. Thousands Attend Agway 28th Meeting vice than in the past,” Saul said. “These farmers must produce effi ciently and competitively. They told Agway they want us to be able to serve their future needs and wants." “We initiated ‘Customer Dri ven: 1995... Focusing on the 21st Century’ in February as a major study to look at the businesses we are in...analyze the trends and the potential for us and the large spe cialized competition moving into many of these rural markets that we serve,” Saul said. “We have developed new strategies to play to our marketing advantages in order to provide better service to farmers and our other customers in these changing markets.” Saul said Agway is placing major emphasis on its three core businesses; agricultural supplies, consumer retailing, through its store and franchised representative system, and energy products and services. Boyd Cook Fred Butler was recognized for his service on the board by President Fred Butler.