Several weeks ago, Family Farm Defenders along with many of our key allies, sent the following letter to Land O’Lakes. We have yet to receive a formal response, which means we will be moving forward with our campaign to put pressure on this farmer co-op to pay a fair price to its own members.
Unfortunately, Land O’Lakes has a rather long history of undermining the Rochdale Cooperative Principles and violating the 1922 Capper Volstead Act, which will be exposed as this nationwide campaign unfolds. Beyond its ongoing collusion with Dean Foods, Dairy Farmers of America (DFA), Schreiber Foods and other dairy giants in racketeering at the Chicago Mercantile Exchange (CME), Land O’Lakes has also been importing milk protein concentrate (MPC) to undercut the domestic fluid milk prices for its own members, as well as pushing dangerous biotech products such as rBGH and RR alfalfa to the detriment of the entire dairy sector.
Stay tuned for future updates on how you can help hold this corrupt co-op accountable for its disreputable activities!
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April 15, 2011
Pete Kappelman
Chairman of the Board
P.O. Box 64101
St. Paul, MN 55164
Chris Policinski
President and Chief Executive Officer
Land O’Lakes, Inc.
P.O. Box 64101
St. Paul, MN 55164
Dear Mr. Kappelman and Mr. Policinski,
We are writing on behalf of our farmer, faith, and consumer organizations to urge you to take immediate action to help dairy farmers survive the ongoing crisis in the dairy industry.
This crisis is not new. The United States has been hemorrhaging dairy farms and farmers for years. Last year, Secretary of Agriculture Tom Vilsack estimated that the number of dairy farms in the U.S. has fallen from 111,000 to less than 65,000 in a decade. Since 2008, historic low prices have increased the strain dramatically on those dairy farmers that remain and have put many on the brink of losing their farms. As just one example, an average Wisconsin dairy farm lost about $100 per cow each month in 2009. Things have eased slightly since then, but farmers are still not receiving a price for their milk that lets them cover their costs.
Dairy farmers have been calling for help for several years. At the USDA and Department of Justice workshop on competition in the dairy sector held in Madison, Wisconsin last year, Secretary Vilsack said, “What we are hearing is a consistent message, which has not always been the case. Dairy producers, large and small, are hurting.”
There is much that should be done by Congress, the Department of Justice and the U.S. Department of Agriculture to ensure that farmers get a price for their milk that covers their cost of production and provides a fair return. But there is also much that should be done by the largest players in the dairy industry, whose decisions about pricing determine what farmers in the United States, and around the world, are paid.
As you know, the economics of the dairy industry are complex, by design. The volatility in dairy markets has wreaked havoc on dairy farmers, preventing them from adjusting their operations to respond to market signals. The unusual mechanisms used in dairy markets, along with the highly perishable nature of the product, mean that normal supply and demand relationships don’t translate to clear price signals for dairy producers.
On top of these challenges, the actions of large buyers in certain key venues like the Chicago Mercantile Exchange and global nonfat milk powder market have a ripple effect that can determine the price paid to farmers in the U.S. and around the world, even if the farmers are not participating in these particular venues. This amplification of the decisions made in just a few venues brings with it a responsibility on the companies and people making these decisions.
Land O’Lakes’ status as a cooperative obligates it to try to help dairy farmers survive this crisis. The purpose of a cooperative is to work for a better price for farmers.
In your 2010 Corporate Social Responsibility report you describe how Land O’Lakes’ “cooperative ideals, our relationship with members and customers, and the long-term, multi-generational point of view we bring to our business” put the company in a position to ensure “ongoing, cooperative success.”
That is why we are calling on Land O’Lakes to commit to doing its part to help dairy farmers get a fair price for their milk. As a cooperative business, and as an industry leader in retail dairy products and a major player in price-setting venues like the CME and nonfat dry milk powder market, Land O’Lakes is in a key position to commit to ensuring farmers are paid what they need to survive.
We believe that a commitment by Land O’Lakes to ensure the following market prices for dairy products would enable U.S. dairy farmers to receive a milk price of $25.00 per hundredweight, a price that covers their cost of production and provides a fair return:
Cheese: $2.70/lb
Nonfat Dry Milk: $1.95/lb
Butter: $2.00/lb [1]
In your Corporate Social Responsibility report, you described corporate social responsibility as “being a ‘good neighbor’ – a neighbor the community can trust, and a neighbor that consistently makes a positive difference.” To meet that goal, Land O’Lakes can do something immediately to help the dairy farmers who are your neighbors emerge from a financial crisis that has decimated many rural communities. We urge you to make a commitment to the fair prices outlined above so that dairy farmers can receive a price that covers their cost of production and allows them to survive.
Thank you for your consideration of this critical issue. We would appreciate a written response to our request by April 29, 2011. If you have questions or need to reach us, please contact John Peck of Family Farm Defenders at (608) 260-0900.
Sincerely,
American Raw Milk Producers Pricing Association
Community to Community Development
Dakota Resource Council
Domestic Fair Trade Association
Family Farm Defenders
Farm Aid
Food & Water Watch
Food Chain Workers Alliance
Food Democracy Now!
Grassroots International
Iowa Citizens for Community Improvement
Maryknoll Office for Global Concerns
Midwest Organic Dairy Producers Alliance
Missouri Rural Crisis Center
National Family Farm Coalition
Pesticide Action Network North America
WhyHunger
[1] These prices are calculated from a Class III milk price of $25.00, minus make allowance.
