Dairy Task Force begins tackling toughest industry issues

Jan Shepel
A group of dairy farmers, lenders, feed suppliers and dairy processors held their first meeting of what is being called Task Force 2.0 to turn the Wisconsin dairy industry around.

MADISON - Several decades ago when California surpassed Wisconsin in milk production and it seemed as if Wisconsin’s dairy industry was going backwards, the state convened a task force to make recommendations on what could be done to improve the dairy climate. Now, a second similar task force is beginning its work to stem the exodus of dairy farmers from the industry and once again turn the industry around.

On Aug. 13, a group of dairy farmers, lenders, feed suppliers and dairy processors held their first meeting of what is being called Task Force 2.0. Mark Stephenson, Director of Dairy Policy Analysis at the University of Wisconsin, is chairing the panel of 31 appointees. “The genesis of this meeting follows that earlier task force of the 1980s but it’s inspired by events today,” he said.

Secretary Sheila Harsdorf hosted the first meeting of the Task Force 2.0 at the Department of Agriculture, Trade and Consumer Protection. Other meetings will be scheduled around the state to allow as many people as possible to hear the discussion.

Secretary Sheila Harsdorf hosted the first meeting of the group at the Department of Agriculture, Trade and Consumer Protection but noted that other meetings would be scheduled around the state to give as many people as possible a chance to hear the discussion. (A second meeting has not yet been scheduled.)

“You have a challenge ahead of you,” Harsdorf said. “We worked hard to develop a task force that represented all parts of the dairy industry — with different sized farm operators, processors and lenders. That’s important. If there’s going to be validity it must be representative of the dairy industry in Wisconsin.” In appointing panelists, they tried to get as much geographic representation as possible, she said.

Dairy, she noted, accounts for half of the economic impact of Wisconsin agriculture.

A panel of 31 is a sizable group, she said, but is similar to the one that was convened in the 1980s. That effort was chaired by Stephenson’s predecessor at the UW, Bob Cropp.

Harsdorf said there was a lot of interest from people who wanted to serve on the task force this year and they had to work hard to pare the roster to its present size. In addition to producers, processors, milk haulers and other allied industry people, the panel includes several lawmakers as ex-officio members who were brought in so that they could hear any recommendations that might require legislative action.

Stephenson told the panel that their work is being watched. “Washington is listening. They already know this task force exists. You can plant the seed and you can water it,” he said.

Ray Cross

Ray Cross, president of the UW System, said the idea for this new task force grew out of a Wisconsin Idea Dairy Summit held in Madison that began to look at what the industry needed going forward. The artisan cheese movement as well as expanded milk production grew out of that earlier effort. Cross said the group needs to identify short and long-term solutions.

“If we can’t grow, how can we hold onto the America’s Dairyland title?” Cross said. “Can we sustain our status?”

Issues to be tackled, he said, include how to make dairy production profitable, how to help processors, and what kinds of research and development is needed by the industry. “This is really important work. This is Wisconsin. This is the heart and soul of Wisconsin.”

Panel members began by introducing themselves. Ryan Klussendorf, a farmer from Medford began his operation in 2003 and said that he thought if he could make it in those tough times he would be okay. “But in 2018 it’s the hardest it has ever been. I don’t want to be the last generation of Klussendorfs to dairy farm.”

Shelly Mayer, a dairy farmer from Slinger and director of the Professional Dairy Producers of Wisconsin, said that these are “excruciating times in dairy right now” adding that action needs to come quickly. “I don’t think we have a lot of time.” She noted that the world comes to Wisconsin for dairy innovation, genetics, information and it’s critically important to maintain and protect that reputation.

Processor Paul Sharfman, who has operated Specialty Cheese Company in Reeseville for 27 years, said his business has doubled every six years in that time, noting that his company’s award winning cheese is only possible because there are dairy farmers producing the quality milk that comes into his plant.

He also commented that labor is a big concern at his plant and for the industry. “We have tried to hire every resident of Reeseville and we can’t get enough workers. We have some workers who weren’t born in America and some people don’t like that.”

Jeff Schwager, of Sartori Cheese in Plymouth, said we need policy answers right now in order to continue having dairy farms in Wisconsin.

Jeff Schwager of Sartori Cheese in Plymouth said his plant takes milk from 130 family farms. “To continue to have dairy farms in Wisconsin is incredibly important. Without them we don’t have a business. We’re in a time period where we need policy answers right now.”

Westby organic farmer Darin Von Ruden who has been farming all his life and is now in the process of transitioning the farm to his son (who will be the fourth generation on their dairy farm) said the industry is very different today than it was in the 1980s. “Back then we had a shortage of milk. Today milk is being dumped.”

Amy Penterman, a dairy farmer and crop insurance agent in Thorp, said she hates to see so much infighting in the industry with arguments of big versus small, organic versus conventional.

Senator Luther Olsen from Ripon said he worked in the family feed business before serving in the Legislature and most of the farmers he dealt with then are gone. “There are the same number of cows in the area but only on a couple of farms,” he said. “I believe this is a great place to produce milk. It’s just a question of who’s going to do it.”

Steve Bechel with Eau Galle Cheese Factory in Durand, said he’s been through several price cycles since he “married into cheese” in 2000. “But this one feels different to me.” When they wanted to expand their operation they went to the 45 dairy producers who supply their milk and “not a lot of them were interested.”

Moriah Brey, whose family grew their herd from 100 cows to 500 cows in Door County, also works for Greenstone Financial as an ag lender. “There are a lot of really emotional things we have been dealing with in lending.”

Michael DeLong, who has worked as an ag lender for 18 years at First Bank of Baldwin, agreed. “I feel like I’m a counselor some days.”

Dr. Melissa Haag, a large-animal veterinarian with Lodi Veterinary Care who is also part of the dairy farm her husband’s family runs, said she’s been concerned about the number of farms that have gone out of business day after day. That affects the veterinary practice and its profitability as client numbers decline.

Top issues

The group’s facilitator asked members of the panel to brainstorm their thoughts on issues facing the dairy industry. They named a variety of things that are challenges for the dairy industry — education of the next generation of farmers, loss of support and infrastructure in rural communities as farms are shuttered, transportation costs, high opportunity costs for new farmers, consumer issues, export markets, farm profitability, regulations, access to credit, labor shortages, milk flowing in from other states, urban/farm conflicts and manure issues.

The Task Force 2.0 discussed various issues challenging the dairy industry, forming subcommittees on a number of key issues.

The panel members then split into small groups to zero in on the issues as they had been outlined in the brainstorming session.

After several discussions they agreed to form subcommittees on several key issues:

  • Product and process innovation and invention;
  • Regulatory certainty;
  • Rural community support and infrastructure;
  • Markets;
  • Price volatility and profitability;
  • Consumer confidence and perception;
  • Education, workforce, management of time and money;
  • Access or barriers to financial capital;
  • Next generation transfer and transition.

Cows and heat

In a brief presentation to the group, Stephenson noted that milk is increasingly being produced in “cow islands” where high-producing dairy cows can be comfortable, which includes Wisconsin and the upper Midwest, New York and parts of the Northeast. As a cow’s production moves up from 20,000 to 30,000 pounds the animal has 30 percent more heat to dissipate. “That’s difficult to accommodate in hotter areas of the country,” he noted. And, as the climate continues to warm, this is increasingly an issue.

“Climate change is bumping up against productivity and trends.”

The climate change seen so far is buckling the jet stream which means that hotter air remains in place over the West and cooler air pools over the Midwest, including Wisconsin.

As our cows here continue to be more comfortable than anyone else’s and produce more milk, that begs the question of where do we go with that milk? “The Midwest may have to pursue more exports,” he said.