Perdue fields questions from farmers on trade, milk prices in town hall meeting

When U.S. Secretary of Agriculture Sonny Perdue came to America’s Dairyland this week, he fielded questions from farmers and dairy industry people in a session that kicked off World Dairy Expo on Tuesday. Questions ranged from specific ones on USDA programs and problems farmers were having with them to broad policy questions on things like milk marketing orders, the spread between block and barrel cheese prices and supply management for dairy.  

Perdue, a two-term governor of Georgia, who was tapped by President Donald Trump to fill the final slot in his cabinet as Agriculture Secretary, grew up on a dairy farm in Georgia and related that he knew what it was like to get swatted in the face with a sloppy Holstein tail first thing in the morning.

Wisconsin’s Department of Agriculture, Trade and Consumer Protection Secretary-designee Brad Pfaff shared the podium with Perdue and noted that farmers took a “triple whammy” this year, with low prices, difficult weather and trade disruptions. He asked the Secretary to do what he could to prevail on his counterparts at the Food and Drug Administration to understand that “milk comes from an animal. Milk does not come from a plant.” That drew applause from the audience at the kickoff session, which was standing room only in a large meeting hall at the Alliant Energy Center.

Perdue countered, in a folksy, humorous way, that he had taken a meeting with rice growers, who were angry that cauliflower growers were marketing a product as “cauliflower rice.” He said he asked them, “is that kinda like rice milk?” And that put an end to the complaining.

Perdue told the large audience that his purpose in getting out to see agricultural constituencies is to allow farmers to “look you up and down” and hear about “things we should be doing and aren’t and things we shouldn’t be doing that we are.”

Even though farmers are generally people who like to remain private and “stay behind the farm gate,” Perdue advised farmers to make sure they are telling their story about how they are producing America’s food because consumers have a growing desire to know specifics on animal care and other aspects of food production.

“Farmers have nothing to be ashamed of,” he added. “You have a great story to tell. Tell it loudly and proudly.”

Paul Adams, an organic dairy farmer from the Eau Claire area, said his segment of the dairy industry is being devastated by the fact that very large dairies purport to be “organic” when they do not adhere to the guidelines set forth in the USDA’s own organic guidelines.

Perdue responded that the overproduction of organic milk is an issue and there is new guidance this week on how farmers become organic dairy producers.

He asked Adams to give him specifics on those dairies he thought were violating the guidelines of the National Organic Program and “we’ll investigate them.”

Several questions centered on the USDA’s Market Facilitation Program, which is aimed at helping farmers who have been hurt by the Trump Administration’s trade wars. Though alfalfa is a crop that is included in the program, Perdue was asked about alfalfa-grass mixtures, because some farmers are being denied payments because their crop isn’t pure alfalfa.

Dane County farmer Jerry Bradley told Perdue of his concern about changing amounts of acreage on his farm, because some years he grows seed corn. He was denied prevented planting protections this year by the USDA’s Risk Management Agency and then because he couldn’t plant he also lost MFP payments because those payments are only available on crops that got planted this year.

“I know vegetable growers who are going through the same thing,” he said.

Paul Bauer, CEO of the Ellsworth Cooperative Creamery, asked a lengthy question regarding the price spread between block and barrel cheese prices. He said he has raised the question before and “even at the USDA people roll their eyes because it’s a complex pricing question.” He noted that 16 or fewer cheese plants have a 58 percent impact on milk prices paid to farmers because it affects the Class III price.

“It’s time for the USDA to take action,” he said. It’s in the interest of manufacturers to keep the market low on barrels at the expense of dairy farmers, he added, an impact that is compounded by electronic trading that is kept secret at the Chicago Mercantile Exchange.

“It’s time to update the system to protect farmers and recognize there is a problem,” Bauer said. After Bauer concluded his lengthy question, Perdue quipped, “Could you repeat the question?” to laughter.

The Secretary said he hears a lot of questions about milk orders and wants to make sure there is no predatory pricing. His agency opened an investigation when the price of beef fell while the price of boxed beef hit record highs after a fire in a slaughter plant. “I don’t know that there’s an easy answer but we’ll look into it,” he promised Bauer.

‘Fake’ meat

Asked about the USDA’s and his own support for “fake meat” products, like lab-cultured meats, Perdue said that these new protein products come down to consumer choice.

“Frankly, people who are choosing non-animal protein for health or ethical reasons are probably not eating your products now. Our job at USDA is not to choose winners or losers but to protect the healthiness and safety of the consumer,” he said.

Purdue added that while there are plant-based “meat” products on the market now, and he said he has tried the “Impossible” burger, there are currently no lab-grown “meat” products commercially available yet.

Richard Brey, owner of a certified organic farm in Coon Valley, reminded Perdue that the Coon Valley watershed was the first of its kind to be protected by soil conservation practices in the 1930s, which marked the beginning of what was then called the Soil Conservation Service – now the Natural Resources Conservation Service.

The Secretary responded that he had not known about Coon Valley’s place in conservation history but noted that farmers live off the land and are “not out there purposely trying to destroy the land or the water quality.”

Jeff Lyon, general manager of the FarmFirst Cooperative with 3,200 members, said he hoped the USDA could do something on the production history aspect of the Dairy Margin Coverage program, so it could be adjusted as new generations are added to a dairy operation. Perdue said the agency is “working on that.”

Trade big topic

Many of those at the town hall meeting were concerned about trade and new or pending trade agreements with other nations. Perdue said he sees that it’s very likely that the USMCA trade pact — which takes the place of the former North American Free Trade Agreement — will be ratified soon by Congress. The topic of trade is the top concern of producers, he said, followed by labor.

“Isn’t it great we’re part of a country where we’re so productive that we have to depend on foreign markets?” he said. “NAFTA was good, but this is a more modern agreement,” he said, referring to the USMCA, adding that a “lot of people are concerned about trade and the economy.”

Chinese negotiators, he added, “will be back in the United States very soon” to continue trade negotiations.

Perdue said his agency has been using its market access program to build other markets around the world, specifically India, Indonesia, Thailand and Japan. “I would love to be in a situation where we’re not dependent on China.”

The outlines of a new trade agreement with Japan were recently announced and he noted that “dairy will be a primary beneficiary of the Japan agreement.”

Pfaff added that Wisconsin’s agricultural products in 2018 were sold into 147 different countries.

Joe Braeger, a Buffalo County dairy farmer, said that last year was a record year for dairy exports according to experts at the National Milk Producers Federation, but still the state of Wisconsin loses two and a half dairy farmers per day as Class III prices languish. “We’ve never experienced a five-year downturn,” he said.

Improvement in DMC

Perdue commented that the 2018 Farm Bill enacted the “much-improved” dairy safety net program in the DMC. “I can’t imagine why someone under 5 million pounds of production wouldn’t sign up. I think we’ve hit the (dairy price) trough,” he said.

Farmers who survived under the 2014 Farm Bill and the old dairy program, he said, should be able to do much better under the new dairy program and the 2018 Farm Bill.

“Farmers would rather have a good price and good production than a government check any time,” Perdue said, which drew applause from the audience.

Karen Schauf, a longtime dairy farmer who recently sold out of the dairy business, asked Perdue if he would ever support mandatory supply management for dairy. He didn’t really answer her question, but later told a scrum of reporters that he couldn’t imagine an American dairy market where supply was controlled. The loss of smaller dairy farms is inevitable, given economies of scale. “It’s difficult, with economies of scale, to survive milking 40, 50, 60, even 100 cows,” he said.

The federal government, he said, had tried programs to stifle productivity — whole herd buyouts, setasides — and they haven’t really worked. “I don’t think America wants to go that way with our productivity. We don’t have — for any kind of business — a guarantee.”

Scott Bentley, general manager of World Dairy Expo, greeted Perdue during the early morning program, noting that the show has about 2,000 top dairy cattle and 60,000 people will attend the show this week. It also attracted 2,500 international visitors from 100 countries, making it a “global meeting place for the dairy industry,” he said.