U.S. milk industry sours

CHIPPEWA FALLS, Wisconsin — The sky was a deep blue, the air was warm and it was a beautiful morning to be on a dairy farm in western Wisconsin.

And then, Mandy Nunes began to cry.

Mandy, who runs Scientific Holsteins with her husband Matt, was sharing how her family had milked cows for five generations and how Matt’s family had also milked cows for five generations.

When she began to talk about the possibility of a sixth generation, Mandy couldn’t get her words out.

She stopped talking, put her hand to her mouth and turned away.

A minute or two later, Mandy had recovered and she continued talking about their farm and the financial struggles of dairy farmers in Wisconsin.

Thousands of small-scale dairy farmers in the United States are going through an emotional and trying time. Milk prices have been low for nearly four years and producers are losing hope.

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From January of 2016 until September 2018, more than 1,400 dairy farmers in Wisconsin sold their herds. As of last count, there were 8,372 dairy herds in the state, down from 13,000 in 2010.

“It’s been a really depressing time for farmers,” said Danielle Endvick, communications director with the Wisconsin Farmers Union in Chippewa Falls. “I think we’re really getting close to losing two (dairy) farms per day.”

Around Chippewa Falls, the disappearance of small dairies is hard to miss.

“Within a 10-15 mile radius… seven farms have gone out in the last two months,” said Vivian Thompson, who milks 100 cows in Cadott, Wi.

Dairy farmers have been leaving the business, for decades, but what’s happening right now feels different, Thompson said.

For decades, dairy farmers were willing to endure the ups and downs of milk prices. Nowadays, producers are doubtful that decent prices and profitability will ever return.

They also doubt that small scale dairies, with 75 to 150 cows, will be around in five or 10 years.

Adam Seibel, who runs an organic dairy in Bloomer, WI, north of Chippewa Falls, is convinced that the small farms are finished.

He thinks the dairy industry will become vertically integrated and dairy processors will control on-farm production. Or they’ll rely on a handful of massive dairies, with herds of 3,000, 5,000 or larger.

“At some point the supplier, that puts the milk on the shelf, is going to go out and contract five different farms… or maybe just one farm,” Seibel said. “Supply me all your milk and I’m going to give you this (price)…. Then they stop picking up (milk) from 20 to 30 other smaller farms.”

The Nunes’ both grew up on dairy farms in California, where immigrants from Portugal and the Netherlands operate most dairies. Matt’s family is from the Azores, a chain of islands in the Atlantic. Mandy’s ancestors milked cows in Holland and her parents still operate a dairy in Oregon.

Matt and Mandy Nunes, who run a dairy in western Wisconsin, voted for Donald Trump in 2016. They don’t like many of Trump’s comments. On the plus side, the President has come to Wisconsin and talked about the struggles of dairy farmers. | Robert Arnason photo

After working in the dairy industry in Michigan and other states, the Nunes moved to Chippewa Falls in 2003 to start their own dairy and a registered Holstein business.

Their farm is only 11 acres. The Nunes buy feed for the 130 cows that they milk and the remainder of their herd.

Their four girls spent a large part of their childhood on the farm. They are now adults and Alexa, the oldest, lives in California.

The other three are in Minnesota. One is married and the two youngest are at the University of Minnesota, studying agriculture and communications.

It’s uncertain if any of their daughters will take over the dairy and maintain the family tradition of milking cows. However, right now, the Nunes have bigger things to worry about.

A few years ago they installed two robotic milkers, replacing a tie-stall barn.

They thought it was the right time to adopt new technology because of their age (early 50s) and a shortage of labour in the area. The decision was likely a good one but the timing was bad.

“We moved to this barn (with milking robots) and we have a tremendous amount (of debt)…. Then, the dairy economy tanks,” Matt said. “We’re not profitable.”

U.S. Department of Agriculture data shows that milk prices were $20 per hundredweight (cwt.), or higher, from 2011 to 2014 in Wisconsin. From 2015 to 2017 average prices were $16 to $17 per cwt.

For most small producers, it costs $16 to $20 per cwt. to produce milk, which means they’re making tiny profits or losing money.

Matt and Mandy are doing what they can to cut costs and improve revenues to pay down their debt. As registered breeders, the Nunes make money selling Holstein genetics. But it’s hard to get decent prices for quality genetics when dairy producers are losing money and thinking of quitting

Cull cows are also a source of income but prices are horrific.

“We sell cull cows for the same money we did 35 years ago,” Matt said. “Right now, everything is tanked.”

Like the Nunes, Vivian Thompson was born and bred outside of Wisconsin.

Vivian grew up on a dairy farm in Kentucky and met her husband Steve in South Carolina.

They had a farm in South Carolina but a dam project and the related flooding affected their property. They decided to relocate to Wisconsin because Steve grew up in the southern part of the state.

They found a farm near Cadott, a town with an unusual claim to fame.

A large sign in Cadott says the town is half way between the equator and the North Pole. The actual latitude of equal distance is five kilometres north of town, almost exactly where Vivian and Steve have their farm.

The Thompson’s milk 100 Holstein cows and Vivian is a director with the Dairy Farmers of Wisconsin, an organization that promotes dairy production and consumption.

Through conversations with fellow producers she’s learned that the exodus of dairy farmers in Wisconsin is more complex than low milk prices.

Many producers are leaving because they’re feeling exhausted.

“You’re wrecking your body. There’s two percent of us feeding 98 percent and we’re just getting tired of it,” she said while walking across the farm toward a group of Holstein calves.

“It’s a burnout. You are… feeding a lot of people and it’s not appreciated.”

There is also anger at groups campaigning against dairy farmers.

“We have PETA (People for the Ethical Treatment of Animals), Mercy for Animals, that are coming out and fabricating stories,” Vivian said. “They have their vegan agenda.”

As well, earlier this year a group of U.S. Olympic athletes launched their own anti-dairy organization called Switch 4 Good, which tells consumers to stop consuming dairy products.

“It seems like everybody is against it,” Vivian said. “After a while you say… feed yourself.”

The Thompsons are still milking cows but their children are now adults and have left the farm.

Vivian, who smiles often and displays the energy of a positive and upbeat person, has doubts about their farm.

Steve has had four knee replacements and their motivation is waning.

“I don’t have a lot of hope,” she said while biting her lip, trying to control her emotions. “(We’re) in our late 50s. Our youngest is in college now. Not sure how much longer we want to do this.”

In the spring of 2017, Canada was a major villain within Wisconsin’s dairy industry.

Grassland Dairy Products, a processor in Greenwood, Wisconsin, cancelled production contracts with about 70 dairy farmers in the state and in Minnesota. Grassland blamed Canada, saying its customers north of the border were no longer buying ultra-filtered milk from the U.S. because of Class 7, a new pricing policy for milk protein concentrates in Canada.

The Grassland incident was huge news in Wisconsin. Governor Scott Walker wrote about the issue and President Donald Trump commented, saying Canada was unfair to U.S. dairy farmers and he would do something about it.

The Grassland episode is still discussed in Wisconsin’s dairy industry but it really was a false “flashpoint,” said Pete Hardin, editor and publisher of The Milkweed, a newsletter.

The actual reason for weak milk prices in the U.S. is overproduction, he said. Dairy farmers in states like Michigan produce too much milk and truck the excess to Wisconsin cheese plants, undercutting local prices.

Mandy and Matt Nunes voted for Trump. Nonetheless, blaming Canada for low milk prices is absurd, they said.

“I don’t think it has anything to do with Canada,” Matt said. “You can have a two percent (milk) surplus in the United States and the price goes down 30 percent, just because there’s a surplus.”

Like many Americans, the Nunes shake their heads at Trump’s Twitter rants and inappropriate comments.

However, Trump has visited Wisconsin and talked about the struggles of dairy farmers. If nothing else, the president is paying attention and he’s trying to start a conversation about dairy, Matt said.

Wisconsin is famous for two things — the Green Bay Packers and cheese. The Wisconsin Dairy Farmers organization promotes the state’s cheese throughout the U.S. and internationally.

If more Wisconsin cheese is consumed in other states and other countries, it should boost regional demand for milk, Vivian said.

The logic seems reasonable and cheese sales could jump by 10, 15 or 20 percent, over the next five to 10 years.

But what are small-scale dairy farmers supposed to do in the meantime? Vivian wasn’t sure and she’s not alone.

It seems like no one, in Wisconsin’s dairy industry, has an answer to that question.

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