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BEAVER DAM - Consumers like the little red barns and the idea of a family producing the milk and food they consume. Some farmers’ organizations believe they have an idea how those family-sized farms can survive.   

Dairy producers going into their fifth year of scrappy milk prices are reacting in a variety of ways. 

For Steve and Sharon Patterson who farm with their son Justin and his wife Anna at Neosho, help cannot come soon enough.

Steve Patterson fought to keep his emotions just below the surface as he talked about his options as they try to bring their son and daughter-in-law into the business.

Patterson says, “It wouldn’t be so bad if it was just the two of us but farming is all Justin ever wanted to do and he’s good at it. It’s his life and livelihood.”   

Supply management needed

“We need some sort of supply management program,” Patterson states. “It should be a two-tier system with a fair pay price for a certain amount of milk and a lower price for what is produced beyond that.”

For a plan like that to work, however, farmers need to work together and that has always been a struggle.

He understands the reasons for farmers going bigger in order to modernize a farm but he believes some farms have gone overboard in their expansions and they have simply flooded the market with too much milk. When they expand they do not find out first if there will be a market for their production.

While the current dairy price crisis affects all dairy farmers on every scale, the financial pressure of the dairy crisis is elevated for smaller farms, which don’t have the purchasing power of larger operations or other advantages scale provides.

During the last month National Farmers Organization and Wisconsin Farmers Union together with several other Farmers Union chapters and the Holstein Association USA have been taking some serious proposals on the road, talking with farmers, legislators, bankers and anyone in a position to help.

Wisconsin meetings were held in Oshkosh and Eau Claire and Platteville. At each meeting, farmers gathered to address solutions. A Columbus dairy producer was among the NFO farmers who described the Family Dairy Farm Relief Act.

Ag economist, Richard Levins, talked about the ripple effect of dairy concerns, among them negative impacts on food security and environment. He suggests that local rural economies would also suffer because of fewer farms patronizing local businesses.

Both NFU and NFO agree that the current federal market order system is no longer serving the purpose it was intended for when implemented nearly a century ago.

Don Hamm, a Fredonia dairy producer who is the state NFO president, was in Beaver Dam on Thursday, April 18, to talk with Dodge County farmers about the NFO’s proposed two-tier structure through the Federal Order System.

The marketing orders in the federal system were originally created in the 1930s to level the dairy farmer playing field and improve prices paid to producers.

Both Hamm and NFO director Tom Crosby serve on Wisconsin’s Dairy Task Force. The proposal introduced by NFO was approved in a subcommittee of the Task Force but did not pass the full group. It did, however, get the attention of the bankers who are worried about the success of the farms they have financed.

Federal order system

Hamm says, “Everyone is coming up with ideas and there is disagreement on the solution but they all agree that the current system is not working. A consistent theme has been to use the federal order system in some way to accomplish the changes that are needed.”

Hamm says, “What has been wrong with the federal market order system all along is the ability to depool milk.”

The two-tier pricing proposal would require all milk nationally to be pooled together into a single marketing order, and every producer would receive a $4 per hundredweight premium on the first million pounds marketed each month. The remainder of the money in the pool would be allocated to producers based on milk marketing volume.

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Hamm believes this would level the playing field, fulfilling the original intent of the federal marketing orders.

The plan, approved at the NFO’s national convention in Ames, Iowa last month, would address the difference in operating costs between a smaller farmer and a large dairy farmer.

Hamm says he believes the program offers a solution to help keep the family-sized dairy in business. 

The proposed program would not change Federal Milk Marketing Order’s administrative costs nor does it increase costs to consumers. In fact, with increased interest in where food comes from and how it is produced, it could encourage more consumers to buy dairy products, knowing the milk comes from family farms.

NFO dairy director Jim Heinen acknowledges that it takes time and can be difficult to change the federal system because it requires an act of Congress, but he says it is not impossible. He points out that the National Jersey Association was successful when they wanted to get component pricing into the federal order. They did it by continually delivering a unified message to Congressional representatives.

Heinen remembers a time when his dad and grandfather were farming when there was a two-tier system for payment. Buyers agreed to pay a higher price for a predetermined amount of milk and then a lower price for anything more. He says if it worked then it could work now.

For the Patterson, help cannot come soon enough.

When Justin started farming with his parents they expanded their herd to 130 cows and built a free-stall barn to house them but they are still milking in shifts in their old stall barn because they had to scrap plans to build a flat-barn parlor when milk prices fell apart.

While Anna works full-time as a nurse, she grew up on a dairy farm and wants to give the family they are just starting the opportunity that she and her husband enjoyed. She says farm life helps children develop a work ethic early on and strengthens families as they work and play together.

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