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Spring/Summer 2012

Zwick Center: A commitment to dairy farming viability in Connecticut

By Hadley Rosen, Class of 2002

The Zwick Center for Food and Resource Policy—formerly the Food Marketing Policy Center, renamed following the generous $1 million gift of Charles J. Zwick (‘50, ‘51)—has a rock-solid commitment to Connecticut’s dairy farmers. Under the direction of Professor Emeritus Ronald Cotterill, who created the Center in 1988, fair dairy pricing was a priority. New Zwick Center director and head of the Department of Agricultural and Resource Economics Rigoberto Lopez has continued to make dairy pricing a main area of focus through his work with farmers, state legislators and policymakers.

“The Connecticut dairy industry is a vital sector of the Connecticut economy,” Lopez said. “It contributes $1 billion in statewide sales, more than 4,000 jobs and provides invaluable open space benefits. Finding the right price for local dairy products and fair payments to dairy farmers is an essential part of the picture.”

Lopez’ study on the economic impact of the dairy industry in Connecticut provided the information to galvanize support in the state legislature in 2009 to create Connecticut Public Act 09-229, which established a fund to make quarterly payments to Connecticut dairy farmers when a minimum sustainable cost of production exceeded the federal milk pay price. Cost of production—the total cost for farmers to sell their milk—is based on many factors and can be complicated to compute, but it heavily influences the prices farmers receive for their sale of milk and milk products. Since the inception of the law, payment figures were based on Vermont’s cost of production as computed by the USDA, not Connecticut’s.

“Connecticut and Vermont are not apples to apples,” said Lopez. “There are major differences between dairy producers in the two states. The Zwick Center had to step in to compute cost of production for Vermont when the USDA stopped producing them in 2011. Without cost figures, no payment decisions can be made.” With feed, energy and milk prices at all-time highs, finding the right estimate for cost of production is even more essential. Lopez has worked with PhD student Adam Rabinowitz to complete four research reports for the Connecticut Department of Agriculture to help Commissioner of Agriculture Steve Reviczky continue to comply with a state law that provides payment to famers when milk prices are low. Following these reports, the Zwick Center hosted a Dairy Cost of Production Group Summit in November that brought together stakeholders, policymakers and economists from Connecticut and Massachusetts, a state that is also in need of reliable costs of production estimates.

Lopez, Rabinowitz and Professor Boris Bravo-Ureta have also developed a process and have a pending Memorandum of Understanding with the Connecticut Department of Agriculture that will produce farm-specific business summaries and a cost of production benchmark for Connecticut dairy farms based on the Connecticut-specific cost of production. This is great news for policy and for improving management of state dairy farms.

Rabinowitz says, “The fact that our state legislators have recognized the importance of dairy farming in Connecticut makes it vitally important that we find a way to accurately implement the policy. Having a cost of production for Connecticut dairy farms that is based on their actual business practices is a major step in the right direction. This information will also allow for additional research opportunities to help further our knowledge of the Connecticut dairy farming industry.”

“The summit was a great first step towards bringing everyone to the table,” Lopez said, “Going forward, with the expertise of our faculty, especially Boris Bravo-Ureta, who will continue to provide support, and a potential partnership with Cornell Extension Service to train and process farm records, dairy pricing will continue to be an area of excellence for the Zwick Center.”