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MMPA was formed on May
23, 1916 when a small group of dairy
farmers from the Howell area gathered at
what was then the Michigan Agricultural
College in East Lansing. They met to
establish a stable, reliable market and
price for their milk. The principles and
organizational structure which these
intuitive farmers established in 1916,
laid the ground work for what is now an
integral part of today's dairy industry.
The basic premise of a
cooperative, groups of people working
together for the betterment of all, has
been instrumental in this country's
history. We continue to do business
through cooperatives today because
history ensures us that it works.
A cooperative is a
business that is owned and controlled by
its users. It differs from an
investor-oriented business where the
control and ownership depends on the
amount of a shareholder's stock.
There are many
differences between a milk marketing
organization run by dairy farmers and
organization run by a board of directors
disassociated with the dairy farm
industry. The decisions made by this
cooperative are not only for increasing
profits for the members, but to make a
better way of life for dairy farmers. The
MMPA board of directors are all dairy
farmers with a vested interest in the
success of this cooperative, for much
more than economical reasons. The dairy
cooperative is one of the few places left
where dairy farmers have influence in
directing decisions regarding their
future.
Most importantly, MMPA
guarantees payment for members' milk. In
addition, any profits gained through the
marketing of the milk are returned to the
entire membership--not a group of
stockholders.
With the amount of milk
produced by dairy farmers, one day
without a place to sell their milk could
be costly. MMPA guarantees a place for
members' milk every day of the year
through its manufacturing plants, as long
as the milk meets established standards
for health and sanitation. In the days
before farmer cooperatives, creameries
often told farmers, "Sorry, we don't
need your milk today." That meant
the farmer had to sell his or her milk
elsewhere, usually for a much lower
price, or dump it down the drain. MMPA
spares today's dairy farmer the burden of
that worry.
Since 1916, some dairy
farmers have lost sight of this important
role. The likelihood of losing a market
for your milk is not as prevalent today,
however, in the early 1990s, four
important milk plants in Michigan shut
down, leaving a number of producers
without their regular market. Those
producers belonging to MMPA never missed
a pick-up or more importantly, a milk
check. If it were not for MMPA's strength
in Michigan's milk marketing sector, many
nonmembers would have lost a market and
money.
MMPA members are paid
for their milk twice a month regardless
if a dairy plant for some reason cannot
pay for the milk on time or even goes
bankrupt. In this case, the member is
paid and MMPA takes the legal steps
necessary to get the money due from the
dairy involved.
Approximately, only 40
percent of the milk produced in Michigan
is utilized in the Class I marketplace
(fluid milk). The milk which is not sold
for fluid purposes must be processed into
other products. MMPA plays a vital role
balancing the Michigan milk market.
Unlike fluid processing plants, which
only buy the amount of milk which they
will use in the Class I market, MMPA buys
milk from all producers, selling it in
all market classifications. This not only
ensures producers that their milk will be
sold, but it ensures consumers of a
steady supply of dairy products.
This market balancing
function is possible because of MMPA's
manufacturing plants. |
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