ABSTRACT
Spurred by producer discontent over $10 per hundredweight manufacturing milk prices and bleak prospects for higher government support prices, 14 dairy cooperatives in the Upper Midwest launched a Dairy Marketing Initiative (DMI) in 1991. Upper Midwestern Dairy Cooperatives and other producer-controlled organizations will use the DMI to work together to increase milk prices, strengthen their bargaining power in the marketplace, and maintain the leading role of the Upper Midwest in the dairy industry. The DMI includes plans for several joint ventures or Common Marketing Agencies (CMAs) for dairy products, including fluid milk, cheese, other manufactured dairy products, and dairy exports. It also calls for efforts to reduce milk assembly and dairy plant costs. These comments represent an early evaluation of the relatively young DMI. Specifically, these remarks consist of a discussion of (1) the origins of the DMI, (2) progress to date on implementing the DMI, emphasizing the CMAs, and (3) what has been learned about the potential effectiveness of CMAs as tools for improving cooperative and industry performance. As will be apparent, the challenges facing dairy cooperatives using CMAs and other strategic alliances are great, but it is also clear the Upper Midwestern dairy cooperatives are doing a number of things correctly.
