Dairy Producers Should Say No to Co-op Bloc Voting Issues

By Dick Bylsma,
National Farmers Director of Milk Sales

Last fall, the American Farm Bureau Federation issued their proposals for changing the Federal Milk Marketing Orders. I am sure many people wondered why they included the elimination of bloc voting as one of their proposals. I want to commend the AFBF for their forethought to realize this may very well be the most important change they are proposing.

In the dairy industry, we have seen incredible consolidation in dairy farm numbers and in processing plant ownership. A document released by AFBF, said during the last 20 years, we have seen dairy farm numbers drop nearly in half, fluid milk utilization fall by nearly 30 percent, and by 2030, U.S. milk production is expected to climb to 250 billion pounds annually. It will be hard to regulate this new model of an industry with the rules written and developed generations ago.

 

Bloc-no-more
Bloc-no-more

I think the majority of the people involved in our industry agree we need some changes. But why eliminate bloc voting? For those of you who are not sure what bloc voting is, let me explain. When someone proposes changes need to be made in the Federal Order system, the result is a hearing process. Once the hearing process is completed and all parties have had an opportunity to state their position, USDA takes all the information and develops the proposed changes being considered for a specific Federal Order, or all Federal Orders.

Those changes are then voted on by the farmers who may be effected by these changes. Cooperative associations have the legal right to bloc vote for all of their membership regardless of how their individual members might feel about the proposal. In other words, all the votes of that cooperatives membership would be voted as the management of the co-op has determined.

So what’s wrong with the co-op representing all its members on any type of change vote? First and foremost is that the best interest of an individual farmer and the opinion of the co-op management may not be the same. How can a co-op that operates processing plants that benefit from lower milk prices vote consistently in favor of proposals that would enhance farm milk prices? How can a cooperative made up of smaller family-type farms and very large mega farms as members vote consistently on proposals that would benefit the one group at the expense of the other? It’s simply not possible.

The system was designed for individual famers to decide their own fate. We must allow each farmer to vote for himself or herself. I have heard the argument that individual dairy farmers don’t understand all the complexities of the Federal Order System and how it could or would affect them. This argument basically says farmers aren’t smart enough to vote on these Federal Order proposals. That is an argument I personally find offensive.

If you are a dairy farmer in the United States today and you have survived all the adversities thrown at you over the past few years, you are, in my opinion, a cut above. You must be smarter than average to have survived and therefore more than capable to cast your own vote on referendum issues. If anyone says we must maintain bloc voting because farmers aren’t capable of making these complex decisions, I suggest we remove that person from any position of having input on this topic.

And lastly, with all the consolidation over the past few years, by allowing bloc voting, you are in reality saying in most Orders the two largest co-ops can decide on exactly what happens in the order. It’s pretty easy to see how this could be manipulated and cause significant competitive issues, or more accurately stated, significant lack of competitiveness in the industry. It has already become difficult for the smaller co-ops in several Federal Orders to pool milk. By allowing bloc voting, we enhance those co-ops’ grip on those Orders and basically eliminate competition.

The Federal Orders were never designed to become a tool of a select few cooperatives to control who can market milk and who cannot in our Federal Order system, but that is exactly what has happened. The sheer size and market dominance of one particular cooperative in many markets should cause everyone to support the elimination of bloc voting. Again, I commend AFBF for its stance on bloc voting and I encourage all within the industry to support this change.

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