John Doran

JOHN DORAN
Appeal Tribune
June 8

If it ain’t broke, don’t fix it. The U.S. Department of Agriculture has proposed new rules that could put the squeeze on a few Northwest dairies, including our own Mallorie’s Dairy in Silverton.

Mallorie’s is one of nine family owned producer-handlers in the Northwest; three, including Mallorie’s, are targeted by the proposed regulatory change.

Producer-handlers are milk retailers who perform every step of the milk production process themselves, from milking the cows to putting milk in the stores.

Producer-handlers are currently exempt from USDA pricing and pooling arrangements that apply to most milk farmers in the industry. While producer-handlers are a dying breed, Mallorie’s is the largest in the state.

So what’s the USDA attempting? They want to keep Mallorie’s and dairies like it from selling its milk for less.

Three big players in the milk industry have persuaded the USDA to consider the change. The choices are: Small producer-handler players can reduce business or close up shop entirely; pay $1 million per year into a national milk marketing pool; or sell into a cooperative like all other small-market milk dealers who perform just a few – but not all – of the tasks to produce milk.

Or, they can raise the prices of their milk.

This proposed USDA change threatens to run Mallorie’s out of business. It challenges them to slice business by more than 1/3, or to pay more per year than they’re generating in revenue.

It’s simply unfair.

“Unfair” is the term the milk giants are using to describe the milk market with producer-handlers operating under the radar. They say direct farm-to-market operations should be regulated so that the milk market can be equalized.

Let’s break down some numbers.

Large milk cooperatives in the Northwest control approximately 96 percent of the milk market while the family owned producer-handlers maintain a share of 4 percent.

Nationally, Dean Foods, the largest dairy products company in the nation and a supporter of the rule change, reported $2.2 billion in net sales in the first quarter of 2005, up $4 million from first quarter in 2004. Dean Foods is on the New York Stock Exchange and employs 29,000 people in 120 plants in four countries. We’re talking “big boys” here.

Locally, there’s little old Mallorie’s. The $1 million it might have to pay into a national marketing pool is more than it pulls in each year. The family-owned dairy, which Bob Mallorie opened in 1954 and whose family still manages it, employs 86 people in one plant in one state of one country.

So what’s the big deal, USDA? Why force do-it-yourselfers to sell milk through the government-regulated system? Why succumb to the prodding of large corporations under the premise of helping some small family farms only to destroy others?

Let’s get this straight: Crush small-market, family business; smother hard work, intuitiveness, and a business model that has withstood the test of time; rob consumers of the chance to buy a product grown and made locally; cave in to the pressures of multi-billion dollar corporations at the expense of free enterprise and capitalism.

Hmmm … how American.  If it ain’t broke, don’t fix it.