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Despite economy, survey says dairy farmers remain optimistic

Jan Shepel
Correspondent
A herd of Holsteins during a milking session at the Sunburst Dairy Farm in Belleville, Wisconsin. UW researchers are asking dairy farmers, producers and equipment manufacturers to integrate dairy data to help farmers make useful, real-time decisions.

 A survey of Wisconsin’s dairy farmers shows that most of the state’s remaining dairy farmers are optimistic and plan to continue in dairying. Although the survey was taken before the full effect of the coronavirus pandemic became apparent – with its devastating effect on dairy supply and demand – 83 percent of the farmers responding to the survey said they saw themselves still milking cows in five years.

"These responses were being sent to us during the time of COVID-19 hitting the dairy industry ... it was interesting that that number was as high as it was compared to 2010," Romanski said. "That was a more optimistic view than it was 10 years ago."

The survey was done by the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) and was developed in partnership with the UW-Madison College of Agricultural and Life Science (UW-CALS.) Results of the survey were published on the DATCP website www.datcp.wi.gov on August 20. Results of a previous survey, completed in 2010, also are posted on the DATCP website.

The survey was distributed to state farmers in mid-March.

Asked about the primary challenges to continuing milking the largest concern among all farmers was extreme weather conditions (46 percent). Regulations and managing day-to-day expenses both came in at 39 percent of respondents; 38 percent identified aging facilities as a challenge; and 25 percent said managing long-term debt was a key challenge; 21 percent said inability find labor (with higher numbers among farms with larger herds).

Eighteen percent named access to land as a key challenge and 15 percent said manure management and disposal was a challenge to their continued milking cows. (Respondents were asked to choose three of ten factors that they viewed as their top challenge in continuing to dairy farm.)

When farmers were asked about their take on the top dairy industry disruptors in the next five years, 70 percent said balancing milk supply and demand; 51 percent said regulations; 44 percent said trade policies; 39 percent said animal welfare; 31 percent said challenging weather patterns; 22 percent said plant-based foods and 17 percent said groundwater concerns.

Despite the optimism in the data, the analysis of the survey at DATCP noted “There was much uncertainty about the next five years. Many respondents wrote that it was dependent on milk prices or they just put in a question mark.”

The DATCP dairy producer survey showed that many dairy farmers feel optimistic about their operation.

In 2010 surveys were sent out to a random sample of 3,000 dairy farms in the state, based on six herd-size categories: 1-29 cows; 30-49 cows; 50-99 cows; 100-199 cows; 200-499 cows and 500 or more cows. After two sets of mailings, 31 percent of the dairy farmers sent back the questionnaires.

The agency then used the herd-size categories to expand the findings to account for all dairy farms in the state. As they did in this year’s survey, in the 2010 survey, a majority of state dairy farmers said they planned to continue milking cows for the next five years. They were asked questions about how the price crisis of the previous two years had hit them and their plans for the future.

All farmers surveyed

Now, after ten years of roller-coaster prices, the number of dairy farmers is much smaller, so surveys were distributed to all of the 7,181 licensed dairy herd owners in Wisconsin and 2,871 were returned – a response rate of 41 percent. In the 2020 survey 83 percent of respondents said they believe their operation will still be farming in five years.

However, the agency said “because we do not know how non-respondents would have responded, we cannot generalize the survey results to all dairy farmers in Wisconsin. Most responses were received before the major impacts of COVID-19 were felt across the state. There were some comments about coronavirus, but it does not seem to have had much influence on the results.”

This year’s survey questions covered a wide range of topics, including markets, labor needs, off-farm employment, conservation practices, diversification, succession and retirement planning.

Almost half of those responding said the farm’s “primary decision maker” was in the 50-64 age range.

In this year’s survey, nearly 90 percent of respondents were conventional farms; 11 percent utilize managed intensive grazing; and 9 percent classified themselves as organic.

Almost 10 percent of respondents felt the need to access mental health services in the past year due to farming challenges.

Respondents were asked to indicate the region where their cows are located, number of cows, rolling herd average and average butter fat and protein components. For purposes of this survey the state was divided into four regions – northwest, northeast, southwest and southeast.

The DATCP dairy producer survey showed the diversity of conservation practices on dairy operations.

By herd size, 26 percent of respondents had 1-49 cows; 37 percent had 50-99 cows, 18 percent had 100-199 cows, 7 percent had 200-299 cows; 8 percent had 300-699 cows and 4 percent had 700-plus cows.

“Since the last dairy producer survey was conducted ten years ago, Wisconsin’s dairy industry has changed,” said Krista Knigge, administrator of DATCP’s Division of Agriculture Development, adding that one of the reasons the survey is done is to assess the state of the industry and current demographics, and learn more about how DATCP and other partners can serve as a resource to dairy producers.

Respondents were asked about practices such as custom heifer raising, using beef or sexed semen on their cows, marketing and raising feed. Larger herds were more likely to have their heifers custom raised but the age at which the heifers left and returned to the farm did not vary much. Over half of the farmers answering the survey reported using beef semen on their farm, but only used it on about one-quarter of their cows and one-third of their heifers.

About one-quarter of the farmers answering the survey said they feed bull calves or excess heifers to market weight. Most farms said they market their bull calves through a sales barn at less than a week of age. Larger farms were more likely to use sexed semen, with about one-third of farms using it statewide.

Growing feed

In the feed department, farmers reported raising about 80 percent of their dairy operation’s feedstuffs.

Operations with larger dairy herds reported having business arrangements like LLCs and corporations. Smaller herds were more likely to be sole proprietorships or partnerships among the farmers who responded to the survey. In all, 67 percent of all the respondents said their business was a sole proprietorship; 8 percent said they had a partnership; 7 percent said their business was a corporation and 18 percent had an LLC.

Twenty-three percent of all the farmers returning the survey said they will need additional labor in the next two years and 84 percent said they would mentor or hire a military veteran; 48 percent said they would hire a person who has been incarcerated. Eighteen percent said they provide housing for employees.

Farmers were asked how much money they had invested over the past five years in facility improvements or additions and how much they anticipated investing over the next five years. The survey asked farmers for their contemplated investments in the next five years in specific categories -- dairy housing, feed handling or storage systems, milking systems or facilities and manure handling or storage.

Farmers with larger dairy herds had the largest investments in all of those categories. Herds that were over 700 cows reported $828,900 on dairy housing, over $205,000 on feed handling, $341,200 on milking systems and $379,100 on manure handling systems from 2015-2019.

Herds that numbered 300-699 cows reported that over the last four years they had spend $456,600 on dairy housing, $71,000 on feed handling systems, $179,900 on milking systems or facilities and $97,100 on manure handling or storage. Smaller totals were seen in the 200-299 cow herd size range and even smaller totals in herds that were smaller.

When farmers were asked what their anticipated facility improvements or additions were in the coming four years, again the largest herds had the highest totals with herds over 700 cows planning to spend $570,000 on dairy housing, $165,000 on feed handling, $260,000 in milking systems and $346,000 on manure handling.

Conservation practices

The survey also asked farmers about their use of various conservation practices. Fifty-nine percent said they used cover crops; 6 percent had diversion ponds; 27 percent used buffer zones; 50 percent utilized no-till; 32 percent had contour strips; 20 percent practiced inter-seeding and 70 percent of the dairy farms responding to the survey had grass waterways as a conservation practice.

Asked about alternative manure handling, 18 percent of the farmers with the smallest herds and 18 percent of the farms with the largest herds used composting as did an average of 15 percent of farmers in all herd size categories. The biggest herds also reported using sand separators (33 percent), digester (9 percent), and nutrient recovery systems (12 percent).

When asked if their operation will still be farming in five years, 83 percent of the respondents said yes while 17 percent said no. The highest numbers of those contemplating exiting the industry in the next five years were those with small herds. Of farmers with herds that numbered 1-49 cows, 23 percent did not think they’d still be milking in five years while 77 percent said they would; among those with 50-99 cows, 19 percent planned to exit while 81 percent said they would still be in business.

Among farmers with herds of 100-199 cows, 88 percent said they still planned to be milking in five years; of those farms with 200-299 cows, 87 percent said they would be in business; in the 300-699 herd category, 94 percent thought they would still be milking in five years; in the 700-plus cow category 99 percent said they saw themselves still in it five years from now.

Sixty-seven percent of farmers in all categories of herd size said they would probably be milking the same number of cows in the next five years while 12 percent thought they would likely milk more cows in the near future.

In similar fashion, 73 percent of all dairy farmers who responded to the survey said they would likely farm the same number of acres in the next five years and 19 percent said they planned to farm more acres.

About one-quarter of farmers who responded to the survey said their milk purchaser had adopted a supply management plan. Over half of respondents also reported utilizing at least one risk management program, with ARC/PLC and dairy margin coverage being the most common. Almost half of respondents said they have no off-farm income from employment and very few farms have diversified into ag-tourism, specialty crops or value-added products to provide more income.

Succession questions

The survey asked the person most responsible for day-to-day decision making on the farm to answer questions on age and farm succession. Almost half of the primary decision makers were aged 50-64. Only 42 percent said they had identified a successor who will eventually take over the management of the farm. In most cases, these successors were their children.

About 40 percent of the farm owners thought the farm would be turned over to a successor while 30 percent were unsure. The financial capacity of the farm to allow more owners and not having a successor were the top barriers to planning farm succession.

Mark Stephenson, Director of Dairy Policy Analysis at UW-CALS, said the 2020 survey results provide “new insight that will help the university direct research and outreach to more specifically address the practices and challenges of Wisconsin dairy producers.”

Analysts at DATCP noted that most of the results of this survey align closely with the 2017 Census of Agriculture results. One difference is that the Census collects data on milk sales, not milk production. As higher sales reflect higher production, however, milk sales can be used to reflect how much milk is being produced. In the Census, 2 percent of farms had 1,000 cows or more, but they accounted for 30 percent of milk sales. Thirty percent of farms had fewer than 50 cows and accounted for 4 percent of milk sales.

Policy questions not asked this year

Reflecting a different time perhaps, farmers were asked some policy questions in the 2010 survey that were not asked in this year’s survey. Those included the following:

  • When asked if the U.S. Department of Agriculture should adopt a supply management program, 19 percent “strongly agreed” and 25 percent “agreed” while 17 percent “strongly disagreed” and 13 percent “disagreed”. Twenty-six percent said they were not sure.
  • Asked if dairy farmers should be able to sell raw milk legally to the public, 24 percent strongly disagreed, 14 percent disagreed, 20 percent were not sure, 21 percent agreed and 21 percent strongly agreed.
  • Asked in 2010 if dairy farms need a foreign guest worker program that allows immigrants to work legally on farms, 26 percent strongly disagreed, 16 percent disagreed, 22 percent were not sure, 21 percent agreed and 15 percent strongly agreed.

Grace Connatser of Wisconsin State Farmer contributed to this report