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Executives of co-ops helping processors

TIMES WASHINGTON CORRESPONDENT
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WASHINGTON — As the primary lobbying group for dairy processors, the International Dairy Foods Association has a top goal headed into next year's rewrite of farm policy: Persuade Congress to reject Foundation for the Future, the main proposal put forth by dairy cooperatives that represent farmers, and stop setting minimum prices that plants must pay farmers or their cooperatives for milk.


To do that, the IDFA needs money. And it is getting it from an eye-catching source: top executives for those very same co-ops.


Two executives who work for farmer-owned cooperatives have given money this year to the IDFA's political action committee — the processors' chief means of access to lawmakers whom it wants to stop the dairy farmers' proposal from becoming law.


Mark S. Korsmeyer, a vice president at Dairy Farmers of America — the nation's biggest bargaining cooperative for dairy farmers — gave $1,000 to the IDFA's PAC in March, according to the committee's latest report at the Federal Election Commission.


And Dave Fuhrmann, president and CEO of Foremost Farms, a farmer-owned cooperative in Wisconsin, gave $500, the FEC filings show.


Neither executive contributed $200 or more to the political action committees for cooperatives, the FEC filings show. That is the minimum amount that requires disclosure under election law.


In turn, the IDFA's PAC will give money to lawmakers who are in a position to advocate for processors' priorities on Capitol Hill. Already this year, the PAC has given $10,000 to House Speaker Rep. John A. Boehner, R-Ohio, $5,000 each to the Democratic and Republican Senate campaign committees and $2,500 to Sen. Kirsten E. Gillibrand, D-N.Y., for instance. Mrs. Gillibrand serves on the Senate Agriculture Committee, which will craft a five-year farm bill; changes in dairy policy will play a major role in the deliberations.


If next year's farm bill debate is anything like the last one in 2007, cooperatives and processors will be on the opposite side of many issues — at least publicly.


In essence, the IDFA believes Foundation for the Future will cost processors more money through government regulation of milk prices. And the National Milk Producers Federation, representing the co-ops, believes farmers need a government-sponsored safety net to protect them when market prices crash as they did in 2009.


Two spokeswomen at Dairy Farmers of America did not respond to emailed questions last week. Unlike Foremost Farms, which has no presence in Northern New York, DFA is the primary cooperative in the region, thanks to a partnership with Dairylea Cooperative Inc. from Syracuse.


The contributions reflect the dual role of cooperatives these days. Although their primary mission is to sell milk produced by their members, big co-ops such as DFA are in the business of making cheese or ice cream or other manufactured goods too, enough that even their politics begin to resemble processors such as Kraft Foods and Dean Foods. Some farmer-owned cooperatives are paying members of the IDFA, but political contributions take the relationship a step further by putting dollars behind the IDFA's policy proposals.


"What are these co-ops that are supposed to be working for farmers doing giving money to the processors' group to fight us?" said Floyd Hall, a retired farmer in LaFargeville who has pushed for milk pricing policies that reflect farmers' cost of production, which is several dollars more per 100 pounds of milk than recent market prices.


"It certainly shouldn't surprise us," said Brenda Cochran, a Tioga County, Pa., dairy farmer who is part of a network of dairy producers in the Northeast pushing Congress for legislation to encourage higher milk prices paid to farmers — a cause they say the big cooperatives have abandoned because of their ties to processors. "It does identify that we need to put a firewall between raw milk and the processors."


That wall is thin at best at DFA, which has embraced the idea that farmers are better off if their marketing organizations make and sell cheese, butter and other dairy goods — including products that are not highly profitable but take milk off the market to avoid an oversupply.


Mr. Korsmeyer heads the global foods division of DFA, a manufacturing piece of the business that encourages exports, but as an executive vice president of DFA, he also oversees day-to-day operations for the cooperative, according to DFA's website.


He has contributed $3,300 to the IDFA's PAC since 2007, FEC filings show, but has not given the minimum reportable amount to the Dairy Farmers of America PAC since 2008.


Not all farmers agree with the NMPF's proposal, which includes a system to discourage farmers from increasing production. It also eliminates a subsidy the government pays farmers when market prices fall below a federal target, and replaces it with a margin insurance program that would pay farmers when low milk prices or high feed costs eat into profits.


Although the IDFA supports a margin insurance program, it strongly opposes supply management and any government effort to mandate further prices plants must pay to farmers. Its counterproposal to Foundation for the Future also calls for eliminating government export subsidies, which the group says are unnecessary to promote exports, and to let plants pay whatever competitive price will secure milk — rather than setting minimums based on milk's end use.


So far in the 2011-12 election cycle, the IDFA PAC has raised $53,276 and contributed $35,280 to campaigns. The PAC for the NMPF has raised $34,548 and contributed $13,000 to candidates.


With the lines blurring between such organizations, some farmers are growing frustrated by the big dollars spent on lawmakers.


"That's something that should be stopped completely, in my opinion, said David Fitch, a Herkimer County farmer who is a director with the National Dairy Producer Organization, a startup pushing for milk prices that reflect production costs. "I really feel they own our congressmen and senators."

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