In the latest industry attempt to boost plunging prices, several of the major milk producer cooperatives in California gathered recently in Visalia to discuss cutting production.

Friday's meeting in Visalia was the latest in a series of attempts to bring prices back to a sustainable level.

Those at the meeting included Land O'Lakes, California Dairies Incorporated, Dairy Farmers of America, Security Milk Producers Association and the National Farmers Organization. Together, the co-ops account for most of the milk produced in California and a significant chunk of the national supply.

The dairy industry has been struggling for months with high feed prices, plunging demand at home and abroad and prices that are 50 percent lower than a year ago. According to dairy economists, even a slight percentage drop in supply could drive wholesale prices high enough to get producers back to the break-even point.

However, no detailed plan has been worked out.

The co-ops needed to verify that a 5 percent cut is workable, according to Donald Vander Poel, a director at Security. There was concern about having enough supply to meeting existing contracts for dairy products, according to Glenn Wallace, CEO of Dairy Farmers of America.

"It's not something that can just be done overnight," Wallace said.

Some hailed the fact that the co-ops were talking to each other as a sign of progress.

"It was a successful day because nobody left the meeting mad at each other," Vander Poel said.

Meanwhile, a separate program to cut milk supply by eliminating cows continues.

A national producer-funded organization called Cooperatives Working Together is running a herd buyout program that sends dairy cows to slaughter. The current round will eliminate 103,000 cows nationwide, according to Michael Marsh, CEO of Western United Dairymen.

Dairymen participate in the program by submitting bids to sell their herds to slaughter. Theoretically, they should get more than the market value for cows because Cooperatives Working Together offers a subsidy.

However, the buyout has failed to get enough participation to boost milk prices, Marsh said.

Many producers figured that taking part in the buyout wouldn't give them enough money to pay off their debts, according to Marsh.

"Folks would have been selling the farm and would still have been left upside down," he said.

Western United Dairymen on Friday called for a second round of herd buyouts, with bids to be received immediately, Marsh said.

"We're still of the opinion that if we can lay off some more cows, we're going to turn the corner," he said.

June 9, 2009