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For Immediate Release

National Farmers Market to the Max convention workshop presenter praises Cooperatives Working Together, offers next step

     Milwaukee, Wis. (Jan. 17, 2008)-At National Farmers' Market to the Max national farm business convention in Milwaukee, Wis., Wednesday, Dr. Richard Levins proposed the next step dairy farmers could take to leverage the success of Cooperatives Working Together (CWT).
     Levins, professor emeritus, Department of Applied Economics at University of Minnesota, said CWT has provided solid returns. "I agree with National Milk's Jim Tillison that CWT has returned good dividends to dairy farmers in the form of enhanced prices," Levins said. But he also suggested there may be even more money on the table for dairy farmers to claim.

     "There are two ways prices are determined in a modern agricultural economy, one is supply and demand, and the other is negotiating power," Levins said. "CWT in its present form works only in the world of supply and demand. Retiring herds shortens supply; enhancing exports strengthens demand."

     Levins emphasized that CWT has not focused on developing negotiating power among cooperatives. Several cooperatives have opted not to enroll in CWT, and others act in ways more consistent with competition than with cooperation, so negotiating power has not been established by CWT.
     Levins proposed an effective marketing agency-in-common (MAC) be formed that would control a large share of the nation's dairy products. A representative of that organization must bargain prices on behalf of all participating sellers with all buyers. He acknowledged the idea is simple in theory, but not so simple in practice.
     "I recommend that CWT's next step be one of developing stronger cooperation among dairy cooperatives in pricing milk," Levins said. "Those who do not have market power will always be at a disadvantage when pricing their products."
     He made his remarks in a dairy farm workshop, "CWT-What's Next? Other speakers included Steve Larson, managing editor, Hoard's Dairyman, Jim Tillison, National Milk Producers Federation and Jim Beatty, director of the Louisiana State University Ag Center Southeast Research Station.
     Bradley Rach, moderator of the workshop and NFO director of dairy, pointed out all NFO members are also members of CWT. Rach said its long been a goal of National Farmers for producers to take better advantage of the power they have as producers of the nation's food and fiber.
     The full text of Dr. Levins remarks are available at www.nfo.org