What's the buzz on cattle sales in Wisconsin?
The announcement last week that the number of Wisconsin dairy herds as of the first week of May is down 206 from the January 1st figure of 8801 will be discussed across dairyland. And the fact that this is 572 fewer herds than the same time a year ago will no doubt draw considerable media comment.
And, I don't know if that's good or bad. Seemingly every media outlet: newspapers, magazines and social is running doom and gloom stories about farm families being “forced out” of business due to low milk prices.
Selling, buying and talking
However, I did some thinking and concluded that milk price alone may not be the reason some of these herds are selling out. Recently, I spent most of an afternoon at the Richland Center Cattle Center (RCC) where Bill Stade and his family run a weekly dairy auction. Sale barns have attracted farmers for many decades to sell and buy cattle and exchange information, just what I was looking for. And there's usually have a good crowd who like to talk.
One herd of about 25 cows from Prairie du Chien was listed as a dispersal. It appeared to be a rather low milk production herd with the top selling cow (a Red and White) bringing $1300. Most were in the $800 - $900 range. Few records were listed, so I'd guess the herd milk production was low.
The owner said he was “tired of milking” and would continue crop farming with his brother (who still milks a small herd). He said the cow prices were a bit less than he expected: “there were a lot of cows for sale but I'm OK. I still have my quota to sell though and I've got a buyer for it so I'll come out.”
A quota. What?!
“Quota,” I exclaimed, “I didn't know there were marketable milk quotas in Wisconsin?” “Yes,” he said. “My milk was going to Swiss Valley Farms and they merged with Prairie Farms Co-op and my milk now goes there. I have a production quota that I can sell privately to another farmer who wants to expand. The co-op will allow this—minus 25%—and let him raise his milk production.”
If that's true, I learned something—maybe! I spent too long trying to talk with someone (anyone) at Prairie Farms Co-op at Edwardsville, IL, to get more info and totally failed and got no call backs. I really don’t think the story is entirely accurate, however, but will continue to try to find out.
Another small herd (15 -20 cows) was also sold. It seems the farm well went dry on Saturday and the owner called a trucker, loaded the cows and took them to RCC—who has barn space—to be sold on Wednesday. The owner was glad to get them sold. “We've milked cows all our life and that's long enough,” he said. "But, the well is still dry!"
Then there was the older man who was buying cows in big numbers. What was he doing, I asked? Yes, he bought 38 head to stock a farm he’d recently purchased in Dane county, Bill Stade said. Maybe for a son, I’m not sure. I hope he has a market for the milk.
I was a bit surprised at the big crowd for the Wednesday dairy auction at RCC—I counted about 100 people in the seats in front of the raised sale ring. “It’s raining outside, what else is their to do?” one onlooker told me, and several others within hearing range agreed.
An auction of this many cattle means things move along rather fast and it took me maybe 10 minutes to get my hearing adjusted to Mike Stade’s auctioneering flow. Prices for animals of all ages—calves, open, bred heifers and cows—were on the low side with very few hitting the $1000 mark. That’s what low milk prices can do.
Talking with Bill
After the sale concluded, I spent a few moments talking with Bill, owner of Bill Stade Auction & Realty, Jefferson and for 23 years, the Richland Cattle Center, talking mostly about the dairy industry.
“Yes, we were a bit surprised at the number of cattle (240) we had today; we expected about 130,” Stade says. "Then one herd came in on Saturday and we had a lot of last minute consignments. But as always, everything sold.”
“In light of the milk surplus, why do farmers buy more cattle?" I asked.
“Maybe they are replacing a cow or cows that left their herd for some reason. Perhaps they seek a cow that, with more feed and care, will develop into a great cow. And it's possible their heifer calf numbers were low and they buy for the longer term,” Stade summarized. "Some just want to add more milk."
All our bidders/buyers are not farmers, Stade said.
"We have heifer calf raisers, a few people who buy animals they intend to market as beef and even people—often Amish farmers or larger herds—who buy young cleanup bulls. Every animal we offer has a buyer," Stade explained.
Many of the young cattle going through Stade's sale rings come from top dairy farms in southern Wisconsin who find themselves with too many heifers and bring them in groups to sell.
Six of the cows came from the herd of Craig and Tricia Komprood and their son, Tyler, who milk 127 cows at Darlington.
“These are cows that didn’t fit into our robotic milking system,” said Tricia, explaining that they had installed two DeLaval robots a few months ago.
"We put in the robots for ‘quality of life," Craig said. “And they are working well. We also farm 250 acres that my dad bought in 1988 as a way for my wife and I to get started farming. We’ve owned it since 1995. As for the bad dairy economy, we’re being careful and so far are doing OK.“
I got to talking with some of the onlookers at the back of the arena and we got on the subject of milk production. I suggested that one of the herds being sold probably had rather low milk production—about 15,000 pound average—too low for today’s dairying.
“Why do you say that?" one man said. “Fifteen thousand pounds is pretty good."
Not when today’s Wisconsin’s state average is at 23,552 (in 2016), I replied. There are quite a few herds averaging 30,000 pounds or more and at least one over a 40,000 pound average.
Again, my talkative former farmer conversationalist disagreed and said that (a 40,000 pound herd average was "impossible". I didn’t argue but did call the DHI at AgSource the next day who found 168 dairy herds in Wisconsin with 30,00 pounds of milk production per year. I don’t blame the talker for getting a bit upset but I don’t think he and many other folks understand the milk producing ability of dairy farmers these days. Thus, the surplus.
This past week there were a half dozen or more whole herd dispersals listed at several major dairy sales arenas around the state. Are these due to financial demands from lenders, I asked?
Not close outs
Not really, they answered. Most are smaller herds owned by folks who planned to retire in a year or few or farmers who are tired of milking cows and would rather not invest in buildings, equipment or cows, and therefore decide to sell. On the other hand, if milk prices were higher, they might have continued to milk cows.
In addition to low milk prices, the other big worry today is having a milk processor to buy the milk. At least two milk processing plants have recently cancelled the contracts of Wisconsin farmers. The easy solution to that trauma has yet to be found.
John Oncken is owner of Oncken Communications. He can be reached at 608-222-0624, or e-mail him at email@example.com.