DPAC tells DOJ/USDA daily price reporting is needed
Dennis Wolff on "transparency" panel in Wisconsin
MADISON, Wis.—USDA and the Department of Justice heard from the Dairy Policy Action Coalition (DPAC) last Friday, June 25 during the joint workshop on dairy markets at the University of Wisconsin-Madison. Former Pennsylvania Secretary of Agriculture Dennis Wolff, who is now a partner with Versant Strategies and serves as government relations consultant for DPAC, was invited to participate in the panel discussing marketplace transparency.
“The CME trading volume represents only 0.4% of the cheese produced and sold in the U.S. and 1.7% of the butter,” Wolff stated. “Does this accurately reflect supply and demand? No. It is a market of last resort. We need to dilute the influence of the CME through daily electronic reporting, and this needs to cover more products with auditing that also extends to inventory reporting.”
During the morning roundtable moderated by U.S. Secretary of Agriculture Tom Vilsack and Assistant Attorney General Christine Varney, Sen. Herb Kohl (D-Wis.) and others agreed.
“The dairy industry must have market transparency, with more frequent reporting that is expanded to include more products,” said Sen. Kohl. “The USDA has the authority to do it, and Congress wants to work with USDA to make it happen.”
For the dairy producer board members of DPAC, who traveled to Wisconsin for the hearing, these words were welcome news after six months of working with members of Congress and USDA in the quest for funding to implement section 1510 of the current Farm Bill.
USDA officials told DPAC in April that the cost is $1 million. In May, Sen. Arlen Specter (D-Pa.) and Rep. Tim Holden (D-Pa.) wrote a letter to Senate and House ag appropriations subcommittees with signatures from more than 20 other members of Congress from 10 states. Since then, adhoc members of DPAC in the Northeast, Southeast and Midwest have done their part to keep this issue on the front burner. The request is now in appropriations as the fiscal 2011 USDA budget is negotiated.
During the DOJ / USDA panel on market transparency, Wolff said the daily electronic reporting injects accountability into the pricing system in several ways, including accuracy and timeliness.
“If I am pricing cheddar cheese on June 24, the only game in town is the CME as the only NASS Survey data available on that date is from June 7-11,” he explained, adding that NASS simply captures and delays the prior activity of the thinly-traded CME.
He cited a parallel quote from a news article about financial market reforms that are making their way through Congress: “This reform brings 100 percent transparency to the market with real-time price reporting. They will no longer be able to make excessive profits by operating in the dark. Exposing these markets to the light of day will put money where it belongs.”
“That comment about financial market reform could just as easily describe the reform that is needed for price reporting in the dairy industry,” said Wolff. A transcript of Wolff's comments during the USDA / DOJ "market transparency panel" are posted here.
Traveling to Wisconsin for the hearing were DPAC chairman Cliff Hawbaker, PA; board members Duane Hertzler, PA, and Alan Kozak, OH; adhoc members Laura Covert, NY, and Jack Fritz, TN, along with Maury Cox, who is the executive director of Kentucky Dairy Development Council. They all arrived a day early to connect with producers from around the country at a dinner meeting organized by David Cooper, general manager of Family Dairies, a member of the Midwest Dairy Coalition.
DPAC is a coalition of grassroots dairy producers actively participating, with a unified voice, in the policies and issues affecting milk pricing. The coalition was formed in November 2009 and has a 20-member board made up of active dairy producers from Pennsylvania, Ohio and New York, along with adhoc producer members serving on action groups from Tennessee, Kentucky, and Indiana. DPAC has received donations from producers in 11 states and is corresponding with producers and organizations in 23 states. For more information, visit www.dpac.net or call 800.422.8335.