Dairy Processing - January/February 2023 - 66
ASSOCIATION INSIGHTS
The immediate need
Trade associations exist to remove roadblocks to success.
by John Umhoefer | Wisconsin Cheese Makers Association
I
n 2023, the dairy industry has the opportunity to focus on
growth and profitability for dairy farms and dairy processors
following years of volatility. And your associations have the
opportunity to lead efforts to amend federal milk marketing
orders and smooth the road to success.
Signs of potential for growth and profitability include:
* US dairy exports are up 4% in 2022, through
November, and cheese moving outside our borders
continues a nonstop growth streak since mid2021.
The US exported 915 million pounds through
November, a record month in a record year for
cheese, yet at 7% of US cheese production, the
promise for future cheese exports is enormous.
*
Fourth quarter domestic cheese sales at retail beat
the annual sales average for 2022, down just 0.5%
from the year before compared to down 1.1% in the
full year impacted by inflation. These 2022 consumer
sales are still far above cheese sales in 2019 (preCOVID),
and retail dairy inflation numbers are now
beginning to drop.
As the industry seizes opportunities presented by
worldwide and domestic markets, some energy will be
expended turning inward to wrestle with the levers of
the nation's 90-year-old milk pooling and pricing system.
Thankfully, trade groups have announced common ground on
nuances of mandatory milk price formulas, but there's little
hope for a complete rethinking of dairy pricing strategies in a
growing global marketplace.
A DANGEROUS PROBLEM
In federal milk marketing order regions, milk buyers such as
bottling plants and cheese manufacturers face government-set
minimum prices for farm milk derived from complex formulas
that try to translate the value of a few commodity dairy
products into mandatory milk prices. Milk buyers pay the full
value of these dairy commodities to dairy farmers in classified
milk prices, keeping only a government-set allowance for
themselves - the make allowance.
Make allowances should reflect changing costs that dairy
manufacturers face so they can pay their workers competitive
wages, keep up with rising energy, ingredient, and packaging
costs, create new products, grow their marketing and
advertising, and invest in their businesses.
But the US Department of Agriculture last decided to
66 JAN-FEB 2023 | DAIRYPROCESSING.COM
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Dairy Processing - January/February 2023
Table of Contents for the Digital Edition of Dairy Processing - January/February 2023
Dairy Processing - January/February 2023 - Intro
Dairy Processing - January/February 2023 - 1
Dairy Processing - January/February 2023 - 2
Dairy Processing - January/February 2023 - 3
Dairy Processing - January/February 2023 - 4
Dairy Processing - January/February 2023 - 5
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