Fair Wage Milk – a New Idea to Strengthen Dairy Farming

Lee Gross, FYP Consulting

Mike and Joan Gilles talk about Fair Wage Milk, a new program to support smaller dairies and rural communities. -photo by Dairy Star

Dairy farmers across the United States have been leaving the business at a rapid rate the past five years. When a dairy farmer quits, a valuable business is lost, and collateral damage spreads throughout their community, state, and region. Mike and Joan Gilles are dairy farmers in Southeast Minnesota, in Winona County near Ridgeway. They have a new vision for keeping dairy farmers in business and have coined a term to describe it: Fair Wage Milk. I spoke with Mike and Joan recently to learn about Fair Wage Milk and how it would benefit dairy farmers and rural America. A lightly edited transcript of our conversation follows.

Lee Gross

Thanks very much for sharing your Fair Wage Milk idea. Tell us about yourselves and your dairy.

Mike and Joan Gilles

We milk 110 crossbred cows in a pasture-based operation near Ridgeway MN. Since we’re first generation farmers, we’ve been able to choose farming practices that best fit our land and family needs. Our dairy has been in operation for 38 years.

Gross

What’s your Fair Wage Milk idea for milk pricing?

Gilles

For easy math, and to start the conversation, the idea is that the first 1 to 1.5 million lbs. of milk produced on a dairy receives a minimum pay price of $30.00 per cwt. Every licensed dairy in the U.S. would be eligible. The goal is that gross revenue will be enough to keep a typical small dairy in business, and the population of dairies surrounding a community sufficient to support that community.

Gross

Why $30.00?

Gilles

That’s a starting point. In 1985 the milk price was $12.76; in today’s dollars that’s $30.44. The dairy farmer’s buying power has significantly decreased over time, and a higher milk price is needed to compensate for inflation. The goal is to provide enough gross revenue to enable smaller dairies to cover fixed costs, with a reasonable margin for cash expenses, including family living. This plan would also help beginning farmers get started, retire debt faster, and increase their odds of long-term success.

The pay price and milk production levels would be monitored and adjusted to achieve the goal of retaining smaller dairies.

Gross

Where’d you get the idea for Fair Wage Milk?

Gilles

We’ve been thinking about this for a long time. The steady loss of dairy farms across the region, in particular dairies managed by young families, has really troubled us. Who’s going to take over the dairy farms that remain? On top of that, we’ve watched our communities lose business after business. Main streets are suffering along with our schools, hospitals, and churches.

We believe that a major policy change is needed to turn this around.

Gross

Our readers may be familiar with Fair Trade coffee or chocolate. Is your plan similar?

Gilles

The Fair Trade program has helped draw attention and resources to rural communities around the globe. It’s common for everyone involved in the food production chain, including here in the U.S., to make a good return – except for the farmer. Fair Trade has helped change that. We believe Fair Wage Milk can do the same for dairy farmers in the U.S.

In addition, many consumers like to buy products that support smaller farms. The Fair Wage Milk label would give them the choice to do so.

Gross

Do you expect animal welfare, land sustainability, and other components like those to be included at some point?

Gilles

Yes, while wages (profit) are essential for dairies to survive, they’ll only prosper when the animals, land, and people on the dairies are treated in a respectful and sustainable way. It’s really a package deal. Sufficient farm profit helps provide the resources needed to properly care for the land, water, animals, and of course, people!

Gross

How is Fair Wage Milk funded?

Gilles

I like to compare this plan to the minimum wage. Minimum wages are designed to help working people bring in enough money to pay their bills. Fair Wage Milk helps dairy farmers in the same way.

Processors would get federal income tax credits equivalent to the pay differential, and indexed to the percent of Fair Wage Milk they purchase. Milk retailers would also receive a tax credit for Fair Wage Milk products sold. Coops and processors would have minimum and maximum participation levels to ensure level playing fields across regions.

We’re making connections now with specialists who will help further develop the proposal. Please contact us if you want to contribute!

 





 

Gross

What kind of feedback have you had so far?

Gilles

Since our idea first hit the press we’ve had a mix of feedback, about 90% positive. Frustration with the status quo is common across dairy regions – rural communities have been losing ground for a long time. People are ready for change. The band-aid approaches to helping dairies are not working.

Gross

What do your dairy farmer friends and neighbors think? How about people you do business with, like your lender, feed dealer, or vet?

Gilles

They want things to change. Whether they’re dairy farmers or in a supporting business, their future is uncertain if we continue on this same path.

Gross

How can someone learn more and help out?

Gilles

We’re happy to talk about Fair Wage Milk with anyone interested. An email is the best way to reach us: fairwagemilk@aol.com.

We encourage everyone to talk to their friends and neighbors about Fair Wage Milk. That’s how we’ll get things moving!

 





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