Land O’ Lakes to charge for over-production

Milk production growth in the Midwestern US is pushing processing to capacity and is driving the move by the US milk processor Land O’Lakes, to charge milk producers for extra milk production. The co-operative has reportedly told its Midwestern state members it would charge producers for extra milk production from 2017.

Land O’Lakes’ producer members in the co-op’s Midwestern dairy region have received a letter informing them that they would join the Eastern and Western Dairy Region in the organisation’s base programme, reports the US publication Dairy Herd Management.

The organisation’s base programme says that farmers could produce as much milk as they want, but if the milk could not be marketed, the over quota milk would have to carry the cost of displacing that milk.

The co-op operative will use 2016 as the base year, commence operation in 2017 and will be reviewed each September thereafter.

Members producing less than 90% of their new Land O’Lakes quota would be eligible for reallocation in September, which would provide base pounds to other members or to be retained by the co-op.

Another issue is that of raw milk, where Land O’ Lakes has given notice that milk pickups will cease at any farm selling raw milk for direct human consumption, as a risk management action.