Milk plants asked to help save Wisconsin dairy farms
Mullins Cheese, which says it's the largest family-owned and operated cheese factory in Wisconsin, has tossed a lifeline to eight dairy farms that were at risk of closing from a trade dispute with Canada.
“My field staff looked at them and said, ‘My gosh, these are great, wonderfully kept farms,’” said Bill Mullins, the Mosinee cheese company's vice president. “I had an opportunity to help a few of them.”
But while Mullins has stepped up and signed contracts to buy the milk from eight family-owned dairy operations, dozens of others haven't been as fortunate. They face a May 1 deadline for when they no longer have a milk processor and could be forced to shut down.
Grassland Dairy Products of Greenwood said it’s dropping the farms because the company lost millions of dollars in business when Canada changed its milk pricing policies in a way that favors Canadian farmers to the detriment of U.S. milk producers. State and federal lawmakers in the U.S. have been urgently seeking short-term solutions along with an investigation of trade pacts with Canada.
On April 24, Wisconsin agriculture officials said their tally showed that Grassland had canceled milk contracts with 58 farms, while another milk plant dropped 14 for reasons not related to the Canada trade issue.
Of the 58 Grassland farms, about 40 still didn’t have a milk buyer, agriculture officials said.
“This is devastating to the farmers, and it’s been really heartbreaking for us,” said Daniel Smith who oversees the Wisconsin Farm Center at the state Department of Agriculture, Trade and Consumer Protection.
The other 14 farmers, not affiliated with Grassland, have made arrangements for a milk buyer, or they're headed into an already planned retirement.
The Farm Center has a “situation room” where staff members are talking with dairy plant owners, urgently trying to connect them with the farms threatened by closure.
“We have a game plan that takes us to May 1, and we know what benchmarks we have to meet every day. We are exploring every possibility,” Smith said.
The farmers who've been selling to Grassland are pleading for help from dairy plant owners across the state, saying if the plants that could each take on five more farms than they're buying from now, it would address the immediate crisis.
'Frustrating for everybody'
But most plants are running at full capacity and aren’t accepting more farms. If they did, some would be forced to sell the additional milk they processed at a loss — or dump it.
“It’s frustrating for everybody. The timing of this couldn’t be any worse,” said Mike North, president of the Dairy Business Association, based in Green Bay. “Everybody is working to try and get some solutions. But the clock is ticking louder by the second.”
Farm groups are rallying to find buyers for the displaced milk. In some cases, assistance has come from other farmers who know they could face a similar dilemma.
“There will be neighbors helping neighbors. The fabric of our dairy industry is being tested now, but I think it will show its strength over the next couple of weeks,” North said.
Mullins said he could use the milk from some of the Grassland farms, and that he won’t lose money on it. His plants process 7.2 million pounds of milk a day — that's roughly 837,000 gallons. Still, he’s had to turn away some farmers, including a family that had completed a farm expansion and had added family members to the business.
“They were very excited about their kids coming home … and now this,” Mullins said.
Mark Heinze, a sixth-generation dairy farmer from Portage, said he’s very fortunate to have struck a deal with Mullins after Grassland canceled his milk contract.
His farm milks 300 cows and has been in his family 145 years.
Getting the April 1 letter from Grassland, informing him they would no longer buy his milk, came as a shock.
Had Mullins not stepped in, “I honestly don’t know if we would have been able to keep our dairy cows,” Heinze said.
Mullins has been in the cheese business 47 years. The company says the deals it signed with the Grassland farms are for the long haul rather than a short-term fix.
“These farms have great milk quality,” Bill Mullins said.
Bill Jaehnert of Oconomowoc said farmers have reached out to him through his cheese business, Artisan 3 Omega Products.
“I am rather close to this situation, as our phone is continually ringing with good Wisconsin dairy farmers looking for a place to sell their fluid milk,” Jaehnert said. “Dairy farming is a rather unique industry as the cows don’t have an on-and-off switch. The milk keeps coming and the cows keep eating."
A global surplus
It’s not just a Wisconsin problem. Dairy producers in other states and countries are also in trouble because there’s a global surplus of their products.
“We have friends in Ireland and Europe in the same situation. There’s just too much milk in the world,” said George Crave, president of Crave Brothers Farmstead Cheese in Waterloo.
The Crave farm supplies the milk for its cheese plant, so it’s not dependent on an outside buyer.
“But we have farms around us that are affected by what’s happened. These are very good dairy operations,” Crave said.
Milk production is often in flux, with supplies swinging up and down with the seasons and changes in the global marketplace.
“The reality of the market is it will fix itself. But it can be pretty painful,” Crave said.
Farm cooperatives have told their members to think twice about adding more cows to their operations in a business climate awash in milk.
“We have to strategically plan for every drop now. As our members look at their futures, and their plans for growth, they have to be in lock-step communication with us,” said Joan Behr, spokeswoman for Foremost Farms USA, a Baraboo-based cooperative owned by about 1,300 dairy farmers.
Some say the flood of milk has resulted from decades of government policies that have encouraged large-scale agricultural production.
It’s been devastating for small farms, said Mark Kastel, co-founder of The Cornucopia Institute, an organic farming watchdog group based in Cornucopia.
“It has been death by a thousand cuts for Wisconsin family-scale dairy farms over the past few decades. An unfair and uneven playing field has allowed factory farms to muscle out” smaller operations, Kastel said.
Wisconsin dairy cows continue to produce more milk than ever before. In March, the total was 2.59 billion pounds, up 1.5% from a year earlier, and the 35th consecutive month of year-to-year increases.
Production still growing
Nationwide, a record 17.5 billion pounds was produced in the 23 major dairy states, up about 2% from March 2016, according to the U.S. Department of Agriculture.
Instead of constantly increasing production, dairy farms would be better off making sure there’s a market for their products first, said Darin Von Ruden, president of the Wisconsin Farmers Union.
“We seem to be doing just the opposite,” Von Ruden said.
On Thursday, President Donald Trump reiterated that Canada was to blame for the current crisis, and that he’s seeking a solution. Canadians have faulted the U.S. for producing too much milk.
It’s a complex problem, according to dairy industry experts.
“In the short run, we have got to put the brakes on milk production. Processors are telling farmers, 'We can work through this ... but don’t compound the problem by expanding milk output dramatically," said Bruce Jones, an agricultural economist at University of Wisconsin-Madison.
Heinze, the dairy farmer from Portage who linked up with Mullins, said he’s worried about the remaining farms that haven’t yet found a milk buyer.
“It’s bittersweet for us because we know that other good farm families are still looking,” he said.
Milk, fresh off the farm, has been dumped in Michigan because there was no place for it to go, Jaehnert said.
“No one wants to see that happen here,” he said.