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Determined to Remain Independepent
BY JOYCE LOBECK, BUSINESS EDITOR YamaSun.com May 29, 2005, 8:56 am Hein Hettinga, owner of Sarah Farms, 2751 E. Palo Verde St., is an independent milk producer and processor. And he would prefer to stay that way, saying that he is able to offer consumers a lower price for milk as a result. The other 77 dairy producers and handlers in the state say his business creates an unfair playing field, and are in favor of a pending U.S. Department of Agriculture decision to subject Hettinga to the federal milk marketing order that, as members of the United Dairymen of Arizona, they are. The USDA decision, announced in April after a series of hearings, recommends that producers and handlers who exceed 3 million pounds of milk a month be subject to the pooling and pricing provisions of the milk marketing order. Hettinga, who operates five dairies in Arizona and a sixth being developed, exceeds that cap. If subject to the marketing order, he said, he would have to pay the federal government $3 million to $4 million a year, money that the government would then turn around and distribute to other dairymen in the state "who have nothing to do with my business." To Hettinga, the decision amounts to "legal price fixing." "It would take the competition out of Arizona," he said. "In other businesses, they would put you in jail for price fixing. They want to make me part of the dairy monopoly and I don't want to go. I've always been my own deal. I think what they want to do is un-American." The federal milk marketing order was established in 1936 when about 50 percent of the nation's dairymen were independent producers and handlers, Hettinga said. Today, it's less than 2 percent. Only one other dairyman in Arizona besides Hettinga is still independent, and that's a small producer-handler near the Grand Canyon. Because Hettinga remains independent, he said, he is "disrupting the market. The co-op doesn't have a total monopoly." In addition, he said, he has the selling point that his milk is produced without bovine somatotropin (BST), a growth hormone given to cows by some dairymen. Hettinga markets the milk he produces and processes under his Sarah Farms brand as well as store labels to Sam's Club, Costco, Food City and Sprouts, a health food store. He predicted that if he does become subject to the marketing order, the price of milk for Arizona consumers would increase by 50 cents a gallon. He's asking consumers to help him retain his independent status by protesting the USDA decision. They can do so by going online to www.keepmilkpriceslow.org. The deadline for public comment is June 13. After that time, Secretary of Agriculture Mike Johanns will render a final decision, based on the comments received. This is the third effort to bring Hettinga under the marketing order. Sen. Jon Kyl, R-Ariz., had introduced legislation twice in the U.S. Senate to subject the dairyman to the order, but both measures were ultimately defeated. The issue, said Keith Murfield, chief executive officer of co-op United Dairymen of Arizona, is that all milk producers and handlers in the state should be treated the same. "Sarah Farms has had an advantage by not paying into the pool," he said of Hettinga's dairy business. Murfield explained that members of the co-op pool their milk, some of which is distributed for fresh consumption and some supplied to a cheese plant under contract to the co-op. The milk used for cheese production brings a lower price. As a result, co-op members receive a price for the "blended" uses of their milk, Murfield said. Because Hettinga sells only fresh drinking milk, considered Class 1, he receives a higher price for his product, Murfield added. If he does become subject to the marketing order, Hettinga said, he could join the co-op, which would market his excess milk or run it through the cheese plant. The way things stand now, he's responsible for marketing his excess milk himself. That's a challenge he would just as soon deal with himself, he said. Articles: Tough row to hoe |
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