ARGENTINA, HOLLAND OFFER SUBSIDIES MANAGE MILK SUPPLY
At a time when global milk supplies are overflowing and free trade agreements are requiring countries to eliminate or scale back dairy subsidies, some co-ops and countries are implementing creative ways to provide extra money to their dairy producers to keep them competitive and thriving or to encourage them to cut back on production.
"While higher milk production benefits the dairy farm, unplanned and unmanaged growth can be quite challenging for a dairy cooperative. Cooperatives often find themselves in a precarious situation when lower milk prices drive higher production because they must buy all of their members' milk," says Sara Dorland, analyst with the Daily Dairy Report
and managing partner at Ceres Dairy Risk Management, Seattle. "At the same time, though, they tend to have difficulty processing and finding a good market for the milk in times of oversupply."