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AMPI plant manager Matt Quade (second from right) explains the cheesemaking process to Congressman Mark Kennedy (far right) during a visit to the Paynesville plant on Friday afternoon. At left are local farmer Duane Burg and a Kennedy staffer.

Kennedy spent 45 minutes talking with farmers who serve on either the governing board of the local plant or on the corporate board and then took a 45-minute tour of the cheesemaking facility.

The dairy farmers praised Kennedy for his work on the farm bill, which contained some provisions that help smaller, midwestern dairy farms, but differed from him on trade.

The new farm bill redid the northeast dairy compact, eliminating the provision that tied price to the distance to Eau Claire, Wis., and substituting Boston, explained Kennedy, who serves on the ag committee in the House of Representatives.

Sign-up for a new United States Department of Agriculture (USDA) program began on Tuesday, Aug. 13. The Milk Income Loss Contract program, authorized by the 2002 Farm Bill, will compensate dairy producers when the domestic price of Class I milk falls below $16.94 per hundredweight in Boston, according to the USDA.

Program payments are scheduled to begin in October, according to the USDA, and will be retroactive to Dec. 1, 2001.

Kennedy said the good news is the dairy program is based on Boston, not Eau Claire, and limits the payments to the first 2.4 million pounds of milk produced in a year, which should limit the subsidies to large dairies, which are more common out west in California and Idaho.

"As you know, we have other states in the country where the scale of dairy farming is much larger than in Minnesota," said Kennedy.

This divide - between large and small dairy states - makes it even harder to get legislation done that benefits Minnesota farms, said Kennedy. Only a quarter of the districts in the House are rural, agriculture-based, he explained.

"The other three-quarters of the districts view these issues as milk consumers, not milk producers," he said. "It's hard to get them excited (about the dairy industry)."

"Even if we get all the ag representatives on the same wavelength, we don't have enough votes," he added.

The AMPI staff and the farmers thanked Kennedy for his efforts with the 2002 Farm Bill, but they were concerned about his support for expanded world trade. "If you think milk prices are low now, the world milk price is $7.50," said one farmer, who urged the dairy industry to protect its domestic market.

Kennedy, who still represents the southwest corner of the state but is running for re-election in a new, mainly suburban district, said his current district ranks second among House districts in soybean production and third in corn production, both of which benefit from trade. Beef also benefits, while dairy and sugar beets are at risk, he said. (His old district, by the way, included four AMPI plants, while his new district contains only the one in Paynesville.)

Negotiating trade agreements "is a balancing act," he explained. "That's why we have to be careful when we negotiate, but I think agriculture as a whole can benefit from expanded milk markets."

Steve Schlangen, an AMPI corporate board member from Albany, said it was impossible for our producers to compete in price with other places in the world that have neither the regulations nor the quality of milk of the United States.

"Everybody is concerned with safety. We've got to watch it from day one on the farm. I think we've got to look at the quality of imports," he said.

His brother, Fred, who also farms near Albany, and Duane Burg of St. Martin argued that the money for dairy farmers was in the system and that they would rather get it up front in price, rather than in price supports from the government.

Milk in small bottles on convenience store shelves costs over $100 per hundredweight, said Fred Schlangen, while farmers get around $10 per hundredweight. "Is that ridiculous or is that ridiculous?" he asked.

Burg argued that getting decent prices for milk might encourage more younger farmers to get in the industry, or stay in, another concern for the farmers being the lack of young farmers in the industry.

"You're not going to have a Paynesville processing plant if you don't have producers," said Kennedy in agreement. Following the discussion, Kennedy went on a tour of the facility with plant manager Matt Quade. AMPI is planning to invest $2.2 million in the Paynesville plant this summer, noted Quade, and intends to be around a long time.

Right now, the Paynesville plant receives 2.2 million pounds of milk per day from 1,000 dairy farms, most in Stearns County but some from as far away as Bagley. The Paynesville plant can only process 1.6 million pounds of milk into cheese per day, so currently nearly 600,000 pounds of milk is shipped immediately to another processing plant.

The 500-pound barrels of cheddar cheese are trucked to Portage, Wis., for further processing. The plant also ships whey, a protein-rich dairy by-product, to Dawson for processing, including nutritional supplements.

In August, AMPI will install new state-of-the-art cheesemaking equipment that will boost its ability to process milk into cheese by 500,000 pounds of milk per day. To install the new equipment, the plant will have to stop production for five days next week, when two dozen contractors will work around the clock on the installation.

"We plan to be here for a long time. We need your help," an AMPI corporate representative told Kennedy, who faces DFLer Janet Roberts and Dan Becker of the Independence Party in the Sixth District race this November.