Farmers still facing same challenges three decades later
March 1, 1991
"This should be the quiet season on our Wisconsin dairy farms: post-holidays, pre-spring planting and in the middle of the meeting season. But this year is not what one might call normal.
The excitement and anticipation for the “new season” normally present in the farming community isn’t there—there’s deep trouble in dairyland. Why? Because dairy farmers have suffered a major drop in milk prices in recent months as an over abundance of milk has decreased farmer’s milk checks fast and far.
Meanwhile, farm expenses, of course, have not declined: Mortgage, taxes and spring cropping supplies come out of the checkbook before eating out at a restaurant or buying a new piece of equipment.
The result? Dairy farmers have reacted in a logical and normal way—they’ve quit spending money and are producing even more milk to pay the bills."
Words good today
Those preceding paragraphs sound like today, March 1, 2019. But no. They were first written in this column published March 1, 1991—exactly 28 years ago when Wisconsin claimed 32,521 dairy herds and the Class III milk price stood at $12.10 per hundred. And, longtime readers will remember that almost similar words and thoughts have appeared in this space many times since.
December 25, 2003
"Dairy farmers had another rough year as milk prices continued at 1978 levels. Note: There were 16,400 dairies in Wisconsin in 2003 and the Class III price was $11.87/cwt. Small dairy operations continue to leave the farm scene. Most are no longer once mom and dad retire. Meanwhile other family farms expand as sons and daughters look to the future. This means borrowing money and building new barns with milking parlors as they look to the long-term.
The fact is, the 1950’s and 60’s type dairy farms are not able to bring in the income needed for the next generation to take over. But that’s a challenge faced by most other small businesses. Times do change."
That I wrote just over 15 years ago and it is still timely today.
January 4, 2019
"The continuous flow of stories of doom and gloom and dairy herds being dispersed and fourth and fifth generation farms leaving dairy farming are heart-rending. Add in the empty barns you see on every rural road and you could get the impression that dairying is dead (or dying). Not true. Milking cows is still a major and expanding business in Wisconsin.
But the economics today are horrible and dairy producers are being challenged to remain viable. We still have 8,110 family dairy farms in our state. About 1.2 million cows live on those farms and are milked two or perhaps three times a day and sold with a January Class III price of $13.96."
Then and now
The above selected quotes from my column over the past 28 years imply that the dairy farm situation seems to have not changed all that much: Too much milk, farms leaving dairying and those that remain producing even more milk.
Of course, there were the good times for dairying when the producer price rose for a period of time before again sinking—it is often claimed that dairying has a 3-4 year cycle of ups and downs. Looking at the Class III milk prices since 1980, I found highs after a period of lows: in 1983 ($12.49); 1989 ($12.37); 1998 ($14.20); 2006 ($15.39); 2007 ($18.04): $2011 ($18.37); 2014 ($22.34) and 2017 ($16.17) and a $1.50/cwt lower since.
Only 25 percent remain
"Why don’t they get out of business if the economics are so bad?" my city friends sometimes ask. Well, many have—from 32,500 dairy farms n 1991 to 8,100 today. That’s a lot.
"So why don’t farmers get together like the school teachers, government workers, teamsters, policemen so many others and form a union/" is another city friend’s query.
Good question; easy answer. Farmers still operate as individual families who invest their own money in their business. They are price takers, not price makers and at heart always feel that hard work, good management and luck will result in success. In addition, they cannot just turn off the milk faucet, not feed the livestock or not haul the manure or create a work slowdown or stoppage.
No looking back
No, we can’t look back for answers to the dairy dilemma. I remember my dad, who never had over 18 cows on our 80-acre farm, saying that a dairy producer couldn’t handle more than maybe 50 cows. He changed his mind after I told him about the 1,000-cow herd I’d visited in California in the early 1970’s who hired topflight herd managers and used big milking parlors.
It didn’t take other dairy producers long to adopt the California way of milking and doing what many Dutch dairy men in California were doing: make dairying a business not a lifestyle. And so we did. Technology, management, computers, genetics and Hispanic employees changed dairying to what it now is.
Achieving success like the 24,000 pound average per cow milk production in Wisconsin means milk—lots of milk. And farmers are not marketers (other than contracting with a processor to take their milk), they are producers. And, the milk flows.
What to do?
Some suggestions. Scott Brown, University of Missouri ag economist recently offered some thoughts: “Perhaps the time has come to recognize that it is going to take a notable shift in one of three areas to move U.S. milk prices significantly higher: a slowdown in U.S. milk production; stronger domestic demand for dairy products or stronger U.S. dairy exports."
Note that in only one of the three suggestions is the producer directly involved and several cooperative dairy processors have indeed placed limits on patron production. A couple of major farm organizations are doing some pondering on supply management as well.
Always more milk
I don’t have an answer—like most everyone else— but have closely watched as dairying has changed over the years. From my youthful days milking cows by hand to an International two unit milker, then college and on to several ag professions, and up to now one consistency remains: Smart farmers using top management and new technology always means more milk.
John F. Oncken owns Oncken Communications, a Madison-based agricultural information company. He can be reached at 608-222-0624 or e-mail him at email@example.com.