Dairy farmers stuck on a treadmill
Forty years ago, you could count 39 dairy farms on the 20-mile route to the neighboring town. Of those farms, only three are left.
It’s not hard to understand why. Dairy farmers were getting paid about the same price per hundred pounds of milk in 1978 as they are today in 2018. Over the same time period costs for dairy farmers’ inputs — seed, fertilizer, building, energy, vet costs, hire labor, and machinery, to name a few — have multiplied in cost many times over. The price of cheese in the store has jumped from about $1.69 per pound to $3.99 per pound. The only thing that is standing still is the milk price being paid to farmers.
American dairy farmers are stuck on a runaway treadmill of over-production, and there are plenty of people out there to encourage us in this never-ending pursuit.
Overproduction causes financial adversity not only to dairy farmers but to their local rural communities as well. Many local businesses that support dairy farmers know they will not be able to stay in business either if we continue down this treadmill of over-producing.
I have always believed it is vitally important to promote and grow the market for wholesome milk and other dairy products. Without controlling our production, we are destroying are markets with a flood of oversupply.
At some point, dairy farmers need to ask ourselves a different question: Not "how do we make more milk?" but instead " how do we make a living?" How do you get off the treadmill of over-production, and walk forward on a solid path to profitability?
This strategy clearly is not working. Just ask any of the 36 dairy farmers who are no longer farming in my neck of the woods today. What if instead of making more milk for less profit, we held milk production steady but earned more for each 100 pounds we produced?
This is not unreachable, Canada has been doing it for years, with the result being that Canadian dairy farmers are being paid a fair price and do not have to deal with the wild price swings that we have here in the United States. The processors in Canada let farmers know in advance what their processing needs are, and the farmers produce to meet market demand, rather than flooding the market and driving milk prices down.
This week there will be a series of farmer-to-farmer meetings across Wisconsin to hear straight from Canadian dairy farmers about how the Canadian system works. I, for one, will be there. I think I owe it to the three remaining dairy farms in my area to consider something different than the treadmill to nowhere we’re currently on.