PRESENTATION OF “HERE AND NOW”
IS MADE POSSIBLE BY THE ANIMAL
DENTAL CENTER OF MILWAUKEE AND
OSHKOSH, A VETERINARY
SPECIALISTS WORKING WITH PET
OWNERS AND FAMILY VETERINARIANS
THROUGHOUT WISCONSIN, PROVIDING
CARE FOR ORAL DISEASE AND DENTAL
PROBLEMS FOR SMALL COMPANION
ANIMALS.
ADDITIONAL SUPPORT FOR “H&N” IS
PROVIDED BY THE L.E. PHILLIPS
FAMILY FOUNDATION.
>> YOU CAN READ IN THE PAPER,
WATCH THE NEWS OR LISTEN TO THE
RADIO.
PUBLIC EDUCATION IN WISCONSIN IS
IN JEOPARDY.
>> STATE SCHOOL SUPERINTENDENT
TONY EVERS SOUNDING THE SCHOOL
FUNDING ALARM.
I'M FREDERICA FREYBERG.
TONIGHT ON “HERE AND NOW,” WE'LL
HEAR ABOUT EVERS' PLAN TO CHANGE
THE WAY WE PAY FOR SCHOOLS, AND
HEAR FROM A SCHOOL FUNDING
EXPERT ABOUT WHETHER OR NOT IT
CAN WORK.
LATER, ASIAN CARP ARE NOW KNOWN
TO BE SWIMMING CLOSER TO LAKE
MICHAGAN WATERS THAN EVER.
WE'LL HAVE AN UPDATE FROM A UW
BIOLOGIST IN SHEBOYGAN.
THE DIRECTOR OF THE WISCONSIN
LAB THAT WILL BE TESTING SHRIMP
AND OTHER SEAFOOD FROM OIL
TAINTED GULF OF MEXICO WATERS IS
HERE.
AND WE'LL TACKLE THE TOPIC OF
MILK MONOPOLIES IN DAIRYLAND.
BUT FIRST, WHAT'S WRONG WITH
WISCONSIN PUBLIC SCHOOLS?
NOTHING THAT $900 MILLION WON'T
HELP, SAYS STATE SCHOOL CHIEF
TONY EVERS.
WE'LL LEARN WHERE THAT $900
MILLION COMES FROM IN A MOMENT,
BUT FIRST THESE COMMENTS FROM
THE SUPER'S THURSDAY MORNING
PRESS CONFERENCE.
>> OUR SCHOOLS FINANCE SYSTEM IS
BROKEN AND WE MUST CREATE ONE
THAT'S FAIR, SUSTAINABLE AND
TRANSPARENT AND THAT SUPPORTS
KIDS.
WE NEED A BIPARTISAN SYSTEM TO
CREATE A FAIR AND SUSTAINABLE
SYSTEM THAT PROVIDES PREDICTABLE
INVESTMENTS, BE EVEN IN THE MOST
DIFFICULT ECONOMIC TIMES AS NOW.
>> EVERS MONEY PLAN IS BASED ON
TAKING WHAT'S KNOWN AS THE
SCHOOL LEVY TAX CREDIT, A SUM OF
ABOUT $900 MILLION, AND PUTTING
IT ALL INTO GENERAL SCHOOL AIDS.
TAX CREDITS, SCHOOL AIDS,
ENROLLMENTS, REVENUE CAPS.
YOU NEED TO BE A COLLEGE
PROFESSOR TO PUT THEM ALL
TOGETHER.
WE HAVE ONE.
PROFESSOR ANDREW RESCHOVSKY
TEACHES APPLIED ECONOMICS AT THE
UW LA FOLLETTE INSTITUTE OF
PUBLIC AFFAIRS.
THANK YOU FOR JOINING US.
>> THANK YOU.
>> EYED LIKE TO ASK FIRST, IF
YOU PUT $900 MILLION INTO
FUNDING SCHOOLS, WHAT HAPPENS TO
PROPERTY TAX RELIEF?
>> IF ALL THE CREDITS, THE $900
MILLION WENT INTO SCHOOL
SPENDING AND WE DID AWAY WITH
THE CREDITS, PROPERTY TAX OWNERS
WOULD PAY HIGHER PROPERTY TAXES.
>> YET, SUPERINTENDENT EVERS
SAYS THAT IS NOT GOING TO
HAPPEN.
>> THE KEY IS THE EXISTENCE OF
THE REVENUE LIMITS IN PLACE FOR
ABOUT 15 YEARS AND LIMIT THE
AMOUNT OF THE SUM OF STATE AID
AND PROPERTY TAXES CAN INCREASE
EACH YEAR.
THIS YEAR, IT'S $200 PER
STUDENT.
>> THAT MEANS THAT SCHOOLS WON'T
ACTUALLY BE SPENDING THE FULL
$900 MILLION IN THE CLASSROOM?
>> THAT'S EXACTLY RIGHT.
MOST OF THAT AMOUNT WILL GO BACK
TO LOCAL SCHOOL DISTRICTS IN THE
FOR OF LOCAL PROPERTY TAX RATES,
LOWER PROPERTY TAX RATES.
SOME OF IT WILL FIND WAY INTO
HIGHER SPENDING.
>> WHAT DO YOU MAKE OF THE
SUPERINTENDENT'S YOU KNOW, PLAN
AND COMING OUT AND SAYING IT'S
GOING TO CHANGE THE WAY WE DO
BUSINESS, MORE HE CAN WITH
ITABLE.
MORE SUSTAINABLE.
IS THIS DIN ENGINE US WITH?
>> I DON'T THINK SO.
ONE IMPORTANT FACT IS THAT WE
HAVE THESE TWO CREDITS ADD UP TO
ABOUT $900 MILLION.
THAT'S A BIG PART OF OUR ANNUAL
BUDGET.
$13, $14 MILLION DOLLARS.
THOSE ARE DISTRIBUTED IN A WAY
THAT ISN'T VERIEST IN THE WAY
THAT IT DOESN'T GO TO THOSE THAT
NEED PROPERTY TAX RELIEF.
AND WE COUNT THOSE AS SUPPORT
FOR EDUCATION WHEN THEY'RE
REALLY NOT SUPPORT FOR
EDUCATION.
THEY PROVIDE PROPERTY TAX
RELIEF.
>> LET ME ASK YOU THIS.
YOU SAID IT DOESN'T GO TO THE
PEOPLE THAT HAVE THE HIGHEST
BURDEN.
WHERE IS MOST OF THIS $900
MILLION NOW IN THE LEFTY CREDIT
GOING?
>> IT IS DISTRIBUTED
PROPORTIONALLY TO THE VALUE OF
YOUR PROPERTY.
IF YOU HAVE EXPENSIVE PROPERTY,
YOU GET MORE MONEY.
AND WE THINK OF, WHEN WE TEND TO
THINK ABOUT PROPERTY TAX RELIEF,
WE THINK ABOUT, YOU AND I,
HOMEOWNERS, GETTING RELIEF.
MY CALCULATIONS SHOW THAT ONLY
ABOUT HALF OF THAT $900 MILLION
FINDS ITS WAY BACK TO
HOMEOWNERS.
THE REST GOES TO ALL SORTS OF
PROPERTY NONRESIDENCE, BUSINESS
PROPERTY.
AND AS OPPOSED TO HOMEOWNERS WHO
REALLY NEED HELP.
>> THEN THAT OTHER ISSUE AND I
WANT TO MOVE TO OTHER THINGS,
BUT IT WAS STUNNING TO LEARN,
AND PERHAPS I'M NAIVE, BUT
STUNNING TO LEARN THAT THIS $900
MILLION IS COUNTED ON OUR BOOKS
AS GOING TOWARD FUNDING THE
SCHOOLS, BUT IT'S NOT.
IT'S A TAX CREDIT.
>> THAT'S RIGHT.
A NUMBER OF YEARS AGO, THE
LEGISLATURE MADE A STATEMENT
THAT SAYS THIS CREDIT IS COUNTED
AS STATE SUPPORT FOR EDUCATION,
ALLOWING THEM TO SAY WE WERE IN
THE PAST FUNDING TWO-THIRDS OF
EDUCATION.
>> IF WE GET RID OF THOSE
CREDITS OR DO SOMETHING
DIFFERENT, WHERE DOES PROPERTY
TAX RELIEF FOR SCHOOLS COME IN?
>> WELL, MY SUGGESTION WOULD BE
TO TAKE SOME OF THAT MONEY AND
PUT IT EXPLICITLY FOR PROPERTY
TAX RELIEF BUT PROPERTY TAX
RELIEF DIRECTED TO THOSE PEOPLE
THAT PAY A LOT OF PROPERTY TAX
RELATIVE TO THEIR ABILITY TO
PAY, RELATIVE TO THEIR INCOME
AND WE HAVE A PROM LIKE THAT
CALLED THE HOMESTEAD CREDIT.
IT'S ON THE BOOKS.
IT NEEDS TO BE SUBSTANTIALLY
EXPANDED.
>> YOU SAY THERE'S A PIECE OF
EVERS' PLAN THAT YOU LIKE,
HAVING TO DO WITH HE CAN WITH
ITABLE SPENDING IN SCHOOL
DISTRICTSES AND SPENDING ON HIGH
POVERTY, HIGH NEEDS STUDENTS.
>> RIGHT.
WE'RE ONE OF FEW STATES THAT
PROVIDES NO EXTRA FUNDING FOR
STUDENTS THAT COME FROM POOR
FAMILIES.
THERE'S AN IMMENSE AMOUNT.
RESEARCH THAT SUGGESTS THAT IF
YOU HAVE STANDARDS AS WE HAVE,
NO CHILD LEFT BEHIND AND STATE
STANDARDS ABOUT STUDENT
PERFORMANCE, IT WILL TAKE MORE
MONEY TOO GET STUDENTS UP TO
CERTAIN STAN CARDS IF THEY DON'T
HAVE THE ADVANTAGES THAT MIDDLE
AND UPPER INCOME FAMILIES HAVE,
COMPUTERS AT HOME AND SO FORTH.
THOSE EXTRA RESOURCES FOR POOR
FAMILIES ARE I THINK ESSENTIAL
IF WE'RE GOING TO HAVE AN HE CAN
WHICH TABLE SCHOOL FUNDING
FORMULA.
>> FOR THE FIRST TIME, EVERS
PUTS INTO THE SCHOOL FUNDING
FORMULA A MEASURE OF SCHOOL
POVERTY THROUGH SOMETHING CALLED
WEIGHTED PUPILS.
>> ALL OF THESE POTS OF MONEY
AND CREDITS AND FORMULAS AND
CAPS, IS IT SO OVERCOMPLICATED
AT THIS POINT THAT IT'S TIME TO
SCRAP IT AND START OVER?
>> THAT IS A VERY GOOD QUESTION
AND I, MY PERSON VIEW IS YES.
THAT WE WOULD DO BETTER FOR
DESIGNING A SYSTEM THAT DOES
WHAT IS FUNDAMENTAL AND MOST
IMPORTANT, GETTING THE MONEY TO
WHERE IT IS NEEDED.
THAT SCHOOL DISBE TRIBUTES THAT
DON'T HAVE MUCH PROPERTY WE,
SCHOOL DISTRICTS THAT HAVE HIGH
COSTS OF EDUCATING KIDS, PUTTING
SMALL RURAL DISTRICTS THAT HAVE
ECONOMIES OF SCALE AND KEEP
PROPERTY TAX SEPARATE.
NO REVENUE CAPS.
PROVIDE ON A SEPARATE BASIS.
>> SCRAPPING IT AND STARTING
ANEW AND PROVIDING EDUCATION TO
ALL OF THOSE THAT NEED IT IN AN
HE CAN WHICH TABLE WAY DOES IT
MEAN SPENDING MORE OF OUR MONEY?
>> IT PROBABLY DOES MEAN
SPENDING SOMEWHAT MORE ON DIRECT
SCHOOL AID THAN WE'RE SPENDING
NOW BUT IT ALSO MEANS, AND I
THINK THIS IS REAL IMPORTANT,
REALOE INDICATING THE MONEY
WE'RE SPENDING NOW AND IF WE
COUNT THE CREDITS AS PART OF
STATE SUPPORT, THAT IS VERY
INEFFICIENT USE OF MONEY.
IF WE COULD COUNT SOME PART OF
THAT $900 MILLION THAT IS NOT
SPENT VERY EFFECTIVELY NOW AT
SCHOOL SUPPORT, I THINK WE COULD
IMPROVE THE FUNDING OF EDUCATION
IMMENSELY.
>> ALL RIGHT.
THANK YOU VERY MUCH FOR TAKING
US THROUGH THIS.
>> THANK YOU.
NOW TO SOME ENVIRONMENTAL NEWS.
BAD NEWS FOR PEOPLE CONCERNED
ABOUT THE ASIAN CARP THREAT TO
LAKE MICHIGAN.
THIS WEEK
FISHERMEN IN WATERS SIX MILES
FROM THE GREAT LAKE CAUGHT A
NEARLY THREE-FOOT LONG ASIAN
CARP.
IT WAS THE FIRST ONE FOUND
BEYOND THE ELECTRICAL BARRIERS
DOWNSTREAM THAT ARE IN PLACE TO
PREVENT THE NORTHWARD MIGRATION
OF THE INVASIVE SPECIES.
THE UW SEA GRANT
BIOLOGIST WHO HAS BEEN A
POINT-PERSON IN WISCONSIN AND IN
ILLINOIS IS PHIL MOY WHO JOINS
US NOW FROM SHEBOYGAN.
>>FINDING A THREE-FOOT LONG
ASIAN CARP IS A FAR CRY FROM
CARP DNA.
WHAT'S YOUR REACTION TO THE
FIND?
>> I AM NOT TOO SURPRISE
DOLLARS.
THE DNA IS EVIDENCE THAT THERE
ARE FISH UP THERE AND THIS
CONFIRMS THAT.
WHAT DOES THE DISCOVERY MEAN
ABOUT WHETHER THE ASIAN CARP HAS
ESTABLISHED ABOVE THE BARRIER?
>> I DON'T THINK THEY'RE
ESTABLISHED.
I THINK THE POPULATION IS, GIVEN
THE LACK OF SUCCESS IN TERMS OF
CAPTURE IN THE TRADITIONAL
SAMPLING, THE NETTING AND THE
ELECTROFISHING, ESSENTIALLY A 3
MONTH EFFORT TO CATCH ONE FISH
UP THERE SUGGESTS TO ME THE
POPULATION IS LOW.
I DO NOT THINK THEY'RE
ESTABLISHED UP THERE.
THESE ARE THE FRONTIER OF THE
POPULATION AS IT MOVED UPSTREAM.
>> SO A 3 FOOT LONG ASIAN CARP
DOESN'T MEAN IT HAS BEEN IN THE
WATER AND THERE ARE SIMILARLY
LARGE FISH IN THE WATER
NECESSARILY?
>> THERE COULD BE.
IT'S A MATTER OF WHEN IT MIGHT
HAVE GOTTEN UP THERE, HOW LONG
IT HAS BEEN UP THERE, A RESIDENT
IN THOSE WATERS.
BUT PROBABLY THAT AREA IS NOT
VERY CONTUSIONIVE TO THEIR
SPAWNING AND ESTABLISHING A
POPULATION.
>> SOME ARE RENEWING THE CALL
SOME ARE RENEWING CALLS TO CLOSE
THE SHIPPING LOCKS NEAR CHICAGO
TO STOP THE CARP.
HAS THAT TIME COME?
>> NO, PROBABLY NOT.
YOU HAVE TO EVALUATE THE
POTENTIAL TO ESTABLISH IN THE
GREAT LAKES AGAINST THE ECONOMIC
CONSEQUENCES OF CLOSING THE
LOCKS.
WE NEED TO WORK TOWARD THE LOCK
TERM SEPARATION, SOME CALL IT AN
ECOLOGICAL SEPARATION.
ADDRESSING THE SERVICES THE
CANAL PROVIDES TO THE AREA.
SO.
RIGHT NOW, I DON'T THINK WE'RE
AT THAT POINT.
>> WHAT DOES THE ECOLOGICAL
SEPARATION CONSIST OF?
>> WELL, I GUESS WE DON'T REALLY
KNOW AT THIS POINT.
BUT IT WOULD BE SOME SORT OF
PHYSICAL SEPARATION THAT
SEPARATES THE GOOD LUCK WATER
FROM THE CANAL WATER -- THE
GREAT LAKES WATER FROM THE CANAL
WATER.
YOU HAVE TO MOVE CARGO AROUND
THAT AND FIND A WAY TO CONVEY
CHICAGO WASTE AND STORM WATER
AWAY FROM THE DOWNTOWN AREA.
>> I'VE SEEN THERE ARE CALLS FOR
POISONING THE AREA.
IS THAT SOMETHING THAT YOU WOULD
SUGGEST?
>> WELL, THAT SMALLER SCALE
POISONING THAT TOOK PLACE LAST
MONTH WAS AN EFFORT TO ASSESS
THE POPULATION ABUNDANCE.
IT WAS A RECOMMENDATION FROM THE
MONITORING AND RAPID RESPONSE
WORK GROUP, PART OF THE REGIONAL
COORDINATION COMMITTEE.
THEY FOUND NO ASIAN CARP IN THAT
AREA.
SOME LIMITED POISONING COULD BE
DONE UP IN LAKE CALL YOU MET
WHERE THIS FISH WAS FOUND TO
ASSESS IT.
>> IT DOESN'T SOUND LIKE WE
SHOULD JUMP UP AND DOWN ABOUT
THIS ALL VERY CONCERNED?
>> WELL, GIVEN THE LOW NUMBERS
OF FISH.
NOW WE HAVE ONE FISH AFTER THREE
MONTHS NETTING EFFORT.
IF WE WERE COLLECTING HUNDREDS
OF FISH, YEAH, IT WOULD BE TIME
TO JUMP UP AND DOWN, BUT IT
APPEARS THAT THE POPULATION IS
STILL QUITE LOW SO IT'S A CAUSE
FOR CONCERN, LET'S NOT GIVE UP
THOUGH ON THE GREAT LAKES.
THE BATTLE IS NOT OVER BUT I
THINK WE NEED TO TAKE THIS AS A
BATTLE CRY THAT WE NEED TO MOVE
AHEAD ON THIS LONGER TERM
SOLUTION THAN ELECTRIC BARRIERS
AND OTHER BEHAVIORAL BARRIERS.
>> PHIL MOY, THANKS SO MUCH.
>> THANK YOU.
>>MORE ENVIRONMENTAL NEWS.
EVEN THOUGH WE'RE 1,000 MILES
FROM THE GULF OF MEXICO,
WISCONSIN WILL BE ONE OF FOUR
SITES NATIONWIDE THAT WILL TEST
THE SAFETY OF SHRIMP AND OTHER
SEAFOOD FROM GULF WATERS, SEA
LIFE THAT MAY --OR MAY NOT --
SHOW SIGNS OF CONTAMINATION DUE
TO THE OIL SPILL.
STEVE SOBEK IS THE DIRECTOR OF
THE STATE FOOD SAFETY LAB AND HE
JOINS US NOW.
>> WHAT TYPES OF SEAFOOD WILL
WISCONSIN'S LAB BE TESTING?
>> SHRIMP, OYSTERS, CRAB AND
SOME FISH.
>> DO YOU HAVE ANY IDEA LIKE HOW
MUCH OF IT YOU'LL BE TESTING?
A LITTLE SUPER BOWL CHAMP EL?
>> RIGHT NOW, THERE'S A TIERED
APPROACH THEY LOOK AT SEAFOOD
FROM THE CLOSED FISHERIES TO SEE
IF THERE IS LIKE A CHEMICAL
CRUDE OIL TAINT.
IF THEY DETERMINE THAT THAT
SEAFOOD DOESN'T HAVE THAT,
THEY'RE GOING TO SEND ABOUT 30
SAMPLES A WEEK TO OUR LABORATORY
TO DO CHEMICAL TESTING.
>> AND DO YOU HAVE A LEVEL AT
WHICH IT WOULD BE DETERMINED
SAFE OR
>> IS ANY LEVEL OF PETROLEUM
CONTAMINIATION OF SEAFOOD SAFE
TO EAT?
>> THE STANDARDS ARE THE
DETERMINATION OF WHETHER IT IS
SAFE TO EAT WILL BE MADE AT THE
FEDERAL LEVEL.
WE'LL DO TESTING.
REPORTING CONCENTRATIONS TO THE
FEDERAL GOVERNMENT AND THEY MAKE
THAT CALL AS TO WHETHER THEY CAN
OPEN OR MAINTAIN CLOSURES.
>> WHEN IS THIS TESTING SUPPOSED
TO START?
>> OUR LABORATORY JUST RECEIVED
INSTRUMENTS TODAY.
WE EXPECT MORE OVER THE NEXT
WEEK OR TWO.
WE WILL GEAR UP AND OUR
EXPECTATION IS TO DO TESTING IN
PROBABLY THE END OF JULY OR
EARLY AUGUST.
FLORIDA'S LABORATORY, SKID
MARK'S AND ARIZONA'S
LABORATORIES HAVE EQUIPMENT IN
PLACE AND ARE GEARING UP TO DO
TESTING AT THE END OF JUNE OR
EARLY JULY.
>> HAS NOOA SUGGESTED TO YOU OR
YOUR LAB WHEN THESE FISHERIES
MIGHT REON?
>> NO.
IT'S ALL PREDICATED ON HOW THE
OIL MOVES, EVERYTHING GOING ON
WITH THE SPILL AND WHEN IT IS
CAPPED AND THE MOVEMENT AND
DIRECTION OF THAT AND WHAT THE
TESTING FINDS AND WHAT THE LABS
FIND.
LIKE EVERYTHING ELSE RELATED TO
THIS SPILL, IT'S UP IN THE AIR
AT THIS MOMENT.
>> WHAT ABOUT SEAFOOD FROM
AREAS JUST OUTSIDE THE AREAS
CLOSED TO FISHING?
SHOULD THERE BE CONCERNS ABOUT
THAT?
>> NOOA HAS IN PLACE BUFFER
ZONES.
SO WHEN WE SAY THE FISHERY, IT'S
THE FISHERY AND SOME BUFFER ZONE
OUTSIDE OF THAT.
THEY DO TESTING OF THE WATER FOR
PH AS WELL AS SEAFOOD.
THEY HAVE AERIAL LOOKS AT THE
GEOGRAPHIC AREAS TO SEE IF THERE
ARE OIL SLICKS AND LOOK FOR
SUBMERGED OIL PLUMES.
>> WHAT DO YOU KNOW ABOUT THE
OTHER LABS IN PROCESS WITH THIS?
IS THERE SEAFOOD FROM THE GULF
THAT HAS NOT PASSED THE TAINT
TEST?
IS THERE A HUGE AMOUNT OF THIS
FISH --
>> THAT WE DON'T REALLY KNOW AT
OUR LEVEL YET.
THEY'RE STILL KIND OF IN THE
FORMULATION STAGE OF HOW THIS
WILL ALL WORK OUT.
THEY HAVE NOT SENT ANY SAMPLES
PAST SENSORY TESTING THAT I'M
AWARE OF.
>> WHY WAS WISCONSIN'S LAB
CHOSEN?
>> WE'RE PART OF A EMERGENCY
RESPONSE NETWORK AND WE'VE HAD A
LONG HISTORY OF RESPONDING TO
EVENTS AND BEING PART OF
RECOVERY EVENTS.
WE HAVE A HISTORY OF THAT AND
BECAUSE WE'RE ALREADY PART OF
THAT NETWORK AND RECEIVE GRANT
FUNDS FOR THAT, WE STUCK OUR
HAND UP AND SAID WE'D LIKE TO
PARTICIPATE.
WE HAD SOME EXPERIENCE WITH THE
INSTRUMENTS THAT SOME OF THE
LABORATORIES DID NOT HAVE.
THEY THOUGHT WE'D BE A GOOD
CHOICE.
>> THANKS SO MUCH.
GOOD LUCK WITH IT.
>> THE RUSS DEPARTMENT OF
JUSTICE AND AGRICULTURE HELD A
DAY LONG WORKSHOP TO HEAR ABOUT
COMPETITION IN THE DAIRY
INDUSTRY.
FEDERAL REGULATORS ARE MOVING ON
INSURANCE FORCING ANTI-TRUST
LAWS AS LARGE COMPANIES BOUGHT
SMALLER COMPETITORS.
MEANWHILE THEY COMPLAIN ABOUT
FLAT PRICES.
TOMORROWVILLE SEC HEARD FROM
FARMERS LOUD AND CLEAR.
>> I THINK THEY FEEL TWO THINGS.
ONE, THEY DON'T FEEL THEY'RE
GETTING A FAIR SHAKE OF THE
OVERALL PIECE OF THE PIE AND
SECONDLY AND PERHAPS AS
IMPORTANTLY, THEY DON'T THINK
THEY'RE CONTRIBUTION IS
RECOGNIZED AND APPRECIATED BY
THE CONSUMING PUBLIC AND I THINK
THEY'RE RIGHT ABOUT THAT BECAUSE
WE HAVE SO FEW FARMERS AS A
PERCENTAGE OF OUR POPULATION AND
BECAUSE WE ARE NOW SO FAR
REMOVED FROM FAMILY MEMBERS WHO
WERE ON THE FARM, THERE ARE
GENERATIONS OF AMERICANS
THINKING THAT FOOD COMES FROM A
GROCERY STORE BECAUSE THEY GET A
BARGAIN PRICE ON MILK OR BUTTER.
THEY NEED TO BE THANKFUL TO THE
FARMER.
WE NEED TO ASK THE QUESTION
WITHIN THE EXISTING RESOURCE, IS
IT BEING FAIRLY AND RESOURCED.
>> AMONG THE PANELISTS.
>> AMONG THE PANELISTS AT THIS
STAR-STUDDED DAIRY WORKSHOP IS
UW MADISON PROFESSOR OF
AGRICULTURAL ECONOMICS, BRIAN
GOULD, PART OF A PANEL EXPLORING
HOW CHANGES IN DAIRY FARM SIZES
AFFECT BOTH FARMERS AND
CONSUMERS.
>> WE KNOW THAT DEAN FOODS IS
THE SUBJECT OF A FEDERAL
COMPLAINT FOR ITS ACQUISITION OF
FOREMOST FARMS PLANTS,.INCLUDING
TWO IN WISCONSIN.
ONE OF THE ISSUES HERE WAS THAT
THOSE COMPANIES WERE COMPETING
FOR THE SCHOOL MILK MARKET IN
WISCONSIN AND DEAN SOUGHT TO
CAPTURE THAT MARKET.
WHY IS THAT A BIG DEAL?
>> ONE LITTLE CORRECTION.
DEAN'S DID NOT ATTEMPT TO
CAPTURE THAT MARKET DIRECTLY.
IT MAY HAVE BEEN AN OUTCOME OF
THEIR PURCHASE.
BUT THE PROBLEM IS USUALLY, WITH
SCHOOLS BUYING SCHOOL MILK,
USUALLY JUST A FEW BIDDERS AND
THE PROBLEM IS WHEN FOREMOST
FARMS WHO DOES A LOT OF BUSINESS
IN THE UP AND NORTHEAST
WISCONSIN, IF THEY WERE
PURCHASED BY DEAN, THERE WOULD
BE FEWER SUPPLIERS AND
ESSENTIALLY ONLY ONE IN A LOT OF
SCHOOL DISTRICTS.
THEREFORE, DEAN COULD DICTATE
THE TERMS OF THOSE CONTRACTS
WITH THOSE SCHOOLS.
>> YOU'RE ON THIS PANEL LOOKING
AT THE LARGER ISSUE OF
CONSOLIDATION.
>> WHAT EFFECT DOES MARKET
CONSOLIDATION ON THE PART OF
DAIRY PROCESSORS HAVE ON THE
PRICE FARMERS GET FOR THEIR
MILK?
>> THINK ABOUT WHAT A DAIRY
FARMER DOES.
HE PRODUCES MILK, A PERISHABLE
COMMODITY.
UNLIKE CORN.
THEY CAN WAIT UNTIL PRICE --
THEY HAVE TO SELL PRODUCT
IMMEDIATELY.
WHEN A COULD-ON COLLECTS FROM A
PATRON AND HAS TO GO TO A
PROCESSOR, IF THEY'RE NOT OF
EQUAL VISOR POWER, IF THEY HAVE
A GREATER ABILITY TO BARGAIN, IT
COULD MEAN LOWER PRICES.
UNEQUAL BARGAINING POWER.
>> DO YOU THINK THAT'S HAPPENING
NOW?
FARMERS HAVE BEEN COMPLAINING
FOR A WHILE NOW ABOUT THE FLAT
PRICES FOR THEIR MILK.
>> I THINK GIVEN THE UNIQUENESS
OF THE DAIRY INDUSTRY, I DON'T
THINK THAT IS THE CASE.
MOST PEOPLE DON'T UNDERSTAND
THAT THE MINIMUM PRICES FOR
DAIRY FARM MILK ARE SET BY A
FORMULA AND THAT'S THE PROBLEM.
THERE'S SOME ISSUES WITH THE
FORMULAS BEING USED AND
PROCESSING PLANTS THAT ARE
BUYING THAT MILK HAVE NO CHOICE
IN TERMS OF THAT PRICE THEY HAVE
TO HAVE.
AT LEAST THE MINIMUM PRICE T
THERE ARE PREMIUMS ABOVE THAT
MINIMUM PRICE BUT IT IS SET BY
FORMULA.
>> I WANT TO GET TO THAT ISSUE,
BUT I WANT TO ASK WHAT AFFECT
THE CONSOLIDATION OF THIS MARKET
MIGHT HAVE ON THE PRICE THAT
CONSUMERS PAY.
>> AGAIN, IF THE PROCESSOR IS
VERY LARGE OR EVEN RELATIVE TO
THE RETAILERS WHICH IS NOT THE
CASE ANY MORE, GIVEN THE
WAL-MARTS AND THE LARGER FIRMS,
THEY COULD HAVE THE POTENTIAL
AGAIN OF BEING ABLE TO BARGAIN
AND PASS THAT BARGAIN, A LOWER
PRICE FROM THE FARMER AND PASS
ON A HIGHER PRICE TO THE RETAIL
OUTLET'S.
>> IS THAT KIND OF WHAT WE MAY
SEE, THIS
>> WHY THE DISSCONNECT BETWEEN
LOW OR FLAT PRICES FOR THE
FARMER AND HIGH PRICES AT THE
GROCERY STORE?
>> THERE'S SOME TRUTH TO THAT,
BUT A LOT OF TRANSFORMATION OF A
PRODUCT WHEN IT GETS TRANSFORMED
FROM A RAW FARM MILK TO THE
FINISHED PRODUCT, THERE'S A LOT
OF VALUE ADDED.
ALSO, MARKETING COSTS.
NOT ALWAYS JUSTIFIED, THAT
DISCONNECT BUT ISSUES OTHER THAN
THE FARM LEVEL MILK PRICE F IT'S
A THIRD OF THE TOTAL PRICE AND
THAT PRICE GOES DOWN BY 25%,
THAT DOES NOT MEAN THE RETAIL
PRICE WILL GO DOWN BY THAT MUCH.
THAT FARM MILK IS ONLY 38% OF
THAT TOTAL COST.
>> ANOTHER ISSUE BROUGHT UP IS
THE WAY FEDERAL MILK PRICES ARE
SET -- AT THE CHICAGO MERCANTILE
EXCHANGE'S SPOT MARKET FOR
CHEDDAR CHEESE.
IT'S CALLED A THINLY TRADED
MARKET THAT'S RIPE FOR
MANIPULATION.
HOW?
>> WELL, THERE'S VERY KNEW
ACTORS.
A COUPLE OF THINGS GOING ON.
VERY FEW ACTORS.
AND THE INDUSTRY, THE CHEESE
INDUSTRY LOOKS TO THAT MARKET TO
SET THEIR WHOLESALE PRICES THAT
THEY SELL TO THE WHOLESALERS.
YOU HAVE A VERY MARKET WHERE
ONLY ONE OR TWO PLAYERS ARE
ACTIVE AND ONE OR TWO PERCENT OF
THE TOTAL US SUPPLY OF CHEDDAR
CHEESE IS TRADED ON THAT MARKET
BUT IT HAS AN AFFECT ON ALL
CHEESE PRODUCED IN THE U.S.
THERE HAS BEEN A CASE, DECEMBER,
2008, DAIRY FARMERS OF AMERICA
AND THEIR OFFICERS FOUND IN
VIOLATION OF COMMODITY FUTURE
TRADING COMMISSION RULES THAT
THEY MANIPULATED THAT MARKET
BECAUSE THEY HAD AN OPPOSITE
POSITION IN THE FUTURE MARKET.
THAT HAS ACTUALLY OCCURRED.
WE HAVE EVIDENCE.
AGAIN, IT'S A PROBLEM THAT YOU
HAVE FEW PLAYERS AFFECTING A
MARKET WHERE A WHOLE INDUSTRY
LOOKS TO THAT TO SET PRICES.
>> DO YOU THINK THAT'S SOMETHING
THE FEDERAL GOVERNMENT WILL
REGULATE IN A DIFFERENT WAY
THEREFORE?
>> WE TRIED ONCE.
THIS USED TO BE IN GREEN BAY.
IT WAS MOVED IN 97 TO THE
CHICAGO MERCANTILE EXCHANGE.
AND WITH THE HYPOTHESIS BEING
THAT IT WOULD BE MORE OPEN AND
ACTIVE.
THAT HAS NOT HAPPENED.
I THINK WHAT IS GOING TO HAPPEN,
IF I WAS TO HAVE A FORECAST WITH
MY CRYSTAL BALL, I WOULD SAY
THERE'S A DISTINCT POSSIBILITY
WE MAY GET AWAY FROM THE MILK
FORMULAS BASED ON WHOLESALE
COMMODITY PRICES TO MORE OF A
SURVEY BASED SYSTEM.
INSTEAD OF WHOLESALE PIECES.
>> ALL RIGHT.
THANK YOU FOR YOUR EXPERTISE.
>> THANK YOU.
THAT'S OUR PROGRAM FOR THE LAST
FRIDAY IN JUNE.
NEXT WEEK, THE RETURN OF OUR
AWARD-WINNING SINGING
COMMENTATOR, PETER LEIDY.
I'M FREDERICA FREYBERG.
HAVE A GREAT WEEKEND.