As dairy prices collapse and Wis farms go under, Big Ag and WisGOP make it worse

2018 has been a bad year for dairy farmers in Wisconsin, with 429 dairy farms going under in the first 8 months of the year (the most in 5 years), and less than 8,400 dairy farms left in the state. In reaction that news, Channel 27 in Madison and Channel 3 in the Capitol City had reports yesterday about the tough times that dairy farmers are going through.

The Channel 3 segment featured an interview with Doug Rebout, who has farmed near Janesville for 50 years. Rebout notes that while prices rise and fall, the real problem is when they stay low, as they have over the last few years, which doesn’t allow any ability to build up a cushion for when things get worse.

The collapsing prices of milk have forced many farmers in the country to call it quits. Not being able to pay bills can put a lot of stress on farmers.

"There's good years and bad years," Rebout said. He added the good years are meant to build cash reserves in anticipation of the bad years.
University of Wisconsin, Madison Director of Dairy Policy Analysis Mark Stephenson said he's not surprised at the declining trend.

"Their cash reserves have pretty much been gone. Many of them are having to borrow now to continue milking," Stephenson said. "There's simply too much milk production happening in the world right now relative to demand."

Stephenson also added many of those who are leaving the industry due to falling milk prices, are farmers who are too old to wait for the prices to go up again or put the money toward it, and most just end up retiring altogether.

In the most recent Producer Price Index report, the price for end-stage dairy products (basically what the store pays) dropped by a seasonally adjusted 1.2% from July, and July was 1.2% lower than June. In addition, end-stage prices for dairy products have dropped 3.7% over the last 12 months, and are down nearly 15% from Spring of 2014.

It looks even worse for the near future, as raw milk prices have plummeted, dropping 10.2% in August alone, 19% in the last 12 months, and more than 41% (!) since peaking 4 ½ years ago.

I also noticed a comment from the head of Big Ag in Wisconsin as part of a bigger story on Wisconsin Public Radio regarding the struggles of state dairy farmers.

Mike North, president of the Dairy Business Association, said it's not surprising given the current market and long-term trend toward consolidation in the industry.

"There’s lots of motivating factors in this but it's a trend that's been going on for my entire lifetime," North said.

Oh, the guy from the Dairy Business Association, the front group for the mega-farms and CAFOs, is saying consolidation is an issue. WHY WOULD THAT BE, MIKE?

Hearing North shrug off “consolidation” as a reason behind the shrinking number of farms is sickeningly disingenuous. A huge reason family farmers are hurting and have to consolidate is due to overproduction from CAFOs and other mega-farms, which leads to the plunging milk prices that have gotten worse this year. In addition, mega-farms have a much better ability to weather through those low revenues through economies of scale that smaller farmers do not have.

It’s especially infuriating because you can count on the Dairy Business Association and their corporate buddies at WMC to run ads in the next 7 weeks claiming that “burdensome regulations” on issues such as runoff pollution are what’s hurting Ma and Pa Kettle, and that people should vote for Republicans as a result. In fact, it’s those GOP stooges that are making an already-difficult situation for small farmers much worse by allowing their Big Ag donors to keep pumping out milk to reckless levels, and letting the mega-farms cut corners at the expense of everyone else in rural communities.

And it requires leaders in Wisconsin whose responses to the dairy farm crisis go further than this.

It’s Cheese Day in Wisconsin!!! Eat More Cheese! 🧀 pic.twitter.com/LuU6ep9NQw

— Scott Walker (@ScottWalker) June 25, 2018