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Eliminating MPCs will help save dairy farms

Fri, Sep 26th, 2003
Posted in Features

Editors note: Preston area dairy farmer Delbert Mandelko participated in the National Farmers Union Fly-In in Washington, D.C. recently to lobby members of Congress to support legislation that would close trade loop-holes that allow the importation of Milk Protein Concentrates (MPCs). MPCs are used in the production of cheese, which competes with Class III milk. Mandelko, the former President of the Minnesota Milk Producers Association, believes that if MPCs are eliminated, the price for milk would increase to the point that government loss subsidies would no longer be needed.According to the General Accounting Office (GAO), the importation of MPC imports have surged by 600%, from 805 metric tons in 1990 to 44,878 in 1999.Journal editor John Torgrimson spoke with Mandelko last week. The following is a summary of their interview:Journal: You recently returned from Washington where you met with elected officials about the dairy industry. Could you brief us on your trip?Mandelko: We were out there for five days (September 6-10) at the request of the National Farmers Union. The purpose of our visit was to urge Congress, the Department of Agriculture, and the Food and Drug Administration to reconsider the importation and use of MPCs (Milk Protein Concentrates). We also encouraged the implementation of Country of Origin Labels. This will help Minnesota dairy farmers with milk prices. The third reason for being in Washington was to oppose the National Cheese Institute, and other groups efforts to redefine milk - so that cheese can be made cheaper. Kraft and the big manufacturers want these changes so that ultra-filtered milk can be used as an ingredient in cheese products. A GAO study found that most of the vitamins, minerals, enzymes and lactose are removed through this filtration process. (See accompanying article by Dave Fredrickson, National Farmers Union President, When is Milk Not Milk?)Journal: What is the status of dairy right now?Mandelko: Our price has come back right now, but were losing farmers, even in Fillmore County. There wont be a dairy industry in Minnesota pretty soon, because we cannot compete with the imports.Our biggest problem has been that there hasnt been profits that allow us to update our facilities or even build new ones. We are losing money and you just cant keep doing that forever. People are basically working for nothing. Journal: Whats keeping Minnesota dairy farmers from doing the California - Idaho model, where you have 2,000 head dairy operations?Mandelko: First of all, I dont think we have farmers that want to get into it like that. There are a few, and that is a mans own prerogative, but I think we have more family oriented dairy producers here. There are also some environmental factors that are holding things back. Journal: So you have factory dairys in the West, and Minnesota operators cant get the same efficiencies on tight margins. The second issue youre trying to deal with is the use of MPCs.Mandelko: MPCs, which are all imported from other countries, are used to make cheese. Imports are up 39% from a year ago, totalling 26,270 metric tons. That is the equivalent of 125,000 cows. I think the local plants we have here in southern Minnesota have stayed away from MPCs because they know it hurts the quality of cheese; they probably use some, but not a lot. But, I think its your Kraft and International Dairy Food people who are making a cheese product that is cheap, so that profits are higher.Journal: Did you get a sympathetic ear in Washington?Mandelko: Yes, pretty much, but they (legislators) dont know what they can do. These milk loss payments we have had this last year, some (legislators) say we should get ready to lose that; as long as the price is down you get paid so much on the Class I price (milk) out East. The milk we are selling now, the price has gone up so it wont cost the government any money. This is the point that I pushed:if we can stop MPCs so that our Class III milk (used to make cheese) would go up, we wouldnt need this payment. Legislators were saying it cost much more than they figured for loss payments. Well, the reason is because milk got cheaper because of the MPCs. Journal: Youre saying take MPCs out of the formula and milk prices will go up.Mandelko: Take the MPCs out of it, there would probably be a shortage in the supply of milk and the price would go up. It is the imports that are killing us.Journal: I see where Senator Dayton (Milk Import Tariff Equity Act) is sponsoring a bill to close this loophole on the MPCs. What are the chances of that passing?Mandelko: We need more votes. The bill will probably be heard this year. There are 196 co-sponsors in the Senate and House, including Senator Norm Coleman. This bill was similar to one sponsored by Rep. Gil Gutnecht in the House a few years ago. But now that he sits on the Agriculture Committee, he feels that it would not be good leadership to come out for or against it. We were hoping to get some help from him on this. Its a disappointment because he is a leader. He tells the dairy people back home how much hes done for the 1st District dairyman, and then he wont support this bill. His colleagues that I talked to said that Gil is a Free-Trader. Journal: So from your viewpoint, Congressman Gutnecht isnt doing much to support dairy operators in southern Minnesota?Mandelko: Until we can get rid of these imports. It is Kraft and the big ones that are importing these large numbers of MPCs. Gil tries to take care of us, but were number two. They are number one.Journal: Did your group come away from Washington with a sense of optimism that this will at least be addressed this year?Mandelko: Yes, but when you go to Washington, youre always optimistic. You have to be.

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