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Wisconsin dairy farmers survive trade dispute crisis

Tuesday, May 2, 2017   (0 Comments)
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By Carol Spaeth-Bauer, Wisconsin State Farmer

WATERLOO - A huge weight was lifted off Shane and Jennifer Sauer last week after they learned Rolling Hills Dairy Processors in Monroe would take the milk produced by their 120 cows.

"It was terrifying to know something you've worked so hard for, you might lose," said Jennifer. "And why? Nobody knows. ... We didn't do anything wrong. That was the hardest part."

The Sauer family was among about 75 Wisconsin dairy producers looking for a new home for their milk after Grassland Dairy Products notified them that the Greenwood-based processor would no longer accept milk from them beginning May 1.

Grassland Dairy said the reduction of incoming milk was due to Canada’s protectionist dairy trade policies. According to the Department of Agriculture, Trade, and Consumer Protection (DATCP), most farmers found a home for their milk before the deadline.

"For weeks we have been working against the clock, trying to find a home for milk from dozens of displaced Wisconsin family farms before May 1," said DATCP Secretary Ben Brancel, at a media gathering at the Sauer's Waterloo dairy. "Today (May 1) I am grateful to announce that 99 percent of the milk has found a home, and that plans are in place to assist the few farms who have not yet signed a contract."

Brancel thanked the dairy processors and milk handlers that "stepped up to help our Wisconsin dairy farm families."

"I appreciate you making arrangements, if only for the short-term, to give these farms the opportunity to continue farming and make plans for the future," Brancel said. "We understand the huge amount of work that had to be done to locate capacity, arrange transportation and complete contracts quickly."

Mullins Cheese was the first to throw a lifeline to eight farmers. Along with Rolling Hills, a number of other processors and cooperatives accepted new patrons.

“April has been a long month for Wisconsin’s dairy community. Our deepest gratitude goes to everyone who has come together to help farm families without a milk buyer," Wisconsin Farm Bureau President Jim Holte said in a statement. "The agricultural community worked together to find a short-term solution but now it is time to look for a long-term solution."

Uncertainty

For Jennifer and Shane, it ended a month of "tremendous stress, not knowing, and uncertainty."

"When you first got the letter, you were almost in disbelief that it was true. You wanted to think that it wasn't true," Jennifer said.

Shane started calling processors he knew. Jennifer had seen her parents go through issues with processors and at first thought, "it was no big deal," another processor would come along the next week. As weeks passed by, the answer from processors kept coming back no.

Shane and Jennifer Sauer milk about 120 cows on their Waterloo dairy farm. The couple is breathing easier after Rolling Hills Dairy Producers Cooperative agreed to take their milk, just days before Grassland Dairy stopped picking up their milk on May 1. (Photo: Carol Spaeth-Bauer/WSF)

A week before the cutoff date, they started questioning if it would be the last time they saw each cow.

"People don't realize, these animals are our lives," Jennifer explained.

Jennifer said they can't thank Rolling Hills Dairy enough.

"Some of the Rolling Hills board members are farmers themselves, so it really hit home to them," said Jennifer.

DATCP was "very helpful" Jennifer added as she thanked all the processors that picked up the farms that were left.

"Farming is not easy and it is a lifestyle we have chosen," said Jennifer. "We can continue our lifestyle. This farm means as much to our children as it means to us. We were hoping to see our children be the fourth generation on this farm."

First step

While the displaced farmers have processors for their milk now, Shane said, "this is not a permanent solution" to the crisis the dairy industry is facing.

"This is the first step," said Shane. "We're happy that (almost) everybody could find a home, but we have to work on a long-term solution."

A statement from the Dairy Business Milk Marketing Cooperative (DBMMC) and Dairy Business Association (DBA) said, "Now, although we have paused to catch our breath, we must not settle back and simply hope for the best going forward. It is critical we maintain an intense focus and pursue solutions that will prevent similar emergencies from happening again."

The groups emphasized, "some of the agreements farmers have made are short-term, so not everyone is out of the woods."

Shane Sauer (middle) and his wife Jennifer talked with media on May 1. The Waterloo couple found a processor, Rolling Hills Dairy Producers, days before being cut off by Grassland Dairy.  (Photo: Carol Spaeth-Bauer/WSF)

Lloyd Holterman, a Dairy Business Milk Marketing Cooperative member and owner of Rosy-Lane Holsteins in Watertown, hopes some of the farmers will have long-term relationships with their new processors.

However, the past month presented a "situation that has never happened in the state of Wisconsin where people could not find processors for their milk," Holterman said.

Nearly 20 years ago, processing plants were running at about 60 to 70 percent of capacity, Holterman pointed out.

"Now we're filling the plants," said Holterman. "We have a lot of good things that we can point to moving forward."

While Holterman hopes this issue doesn't happen again, "we are better ready to deal with it."

A positive aspect coming from the situation was people coming together. While farmers compete internally, externally they stick together, Holterman said. Politicians from national to state levels and state leadership in the Department of Agriculture worked full time to help find markets for the displaced milk.

"It shows there are solutions if people come together and work hard together for a solution," said Holterman.

While the milk surplus is good for consumers, since they get a high quality product that is priced decently, people have to have a backup plan if this issue would happen again.

"We want to make sure we always have a plan B and always have markets for our product," Holterman said.

Export markets

The Wisconsin dairy industry relies a lot on export markets, according to Wisconsin Farm Bureau Federation Director of Governmental Relations Karen Gefvert.

"One of the things we really need and rely upon is a consistent and reliable export market. The Wisconsin dairy industry is really poised to do a great job at producing Wisconsin dairy products," Gefvert said. "We can do that really efficiently, so one of the things is that we need a reliable and consistent export market for our products."

When Canada reclassified milk products, processors in Canada were able to buy ultra-filtered milk at the same or less expensive price than they were purchasing from the Wisconsin processor, Gefvert explained.

"Trade is crucial to Wisconsin’s agricultural economy, especially dairy. Small changes or disruptions can have a large ripple effect that negatively impact farmers, as we have seen demonstrated recently," said Holte. "Global demand for dairy and other agricultural products is crucial to the success of the dairy community. Wisconsin Farm Bureau will continue to work with other agricultural groups and state and federal lawmakers to look for solutions for exports to be encouraged and not dampened.”

Governor Scott Walker said in a news release, "Canada is our largest trading partner and we want this strong relationship to continue, but we think they’re just plain wrong on this issue."

"President Trump and Governor Walker have stood up for Wisconsin’s dairy industry and are working to create a level playing field so our dairy farmers and processors can thrive for many generations" said Brancel. "We are focused on free, fair and transparent trade policies, and on reopening the Canadian market for all of U.S. dairy products, including ultra-filtered milk."

The DBMMC and DBA pointed out, "Many factors are at play, from in-state processing capacity to international trade policies. All of them need careful examination, creative thinking and collaborative involvement."

Moving forward, Gefvert said communication is important. Farmers need to work with their lenders, milk haulers and processors on open and consistent dialogue.

"We need to make sure that moving forward all the entities that are involved in the dairy industry are talking to one another, so we can quickly address any situations that might impact the dairy industry in the future," said Gefvert.

Last week, Walker announced the Wisconsin Housing and Economic Development Authority (WHEDA) will provide amended loan guarantees to dairy farmers and processors with more favorable terms.

Effective immediately, the loan guarantees will help Wisconsin dairy producers and processors access much-needed capital to address current market conditions.

The changes provide more favorable repayment and collateral terms to farmers and increased guarantees for producers at lower fees. The loan guarantee follows Walker’s request for President Trump to address Canada’s decision to unilaterally shut down the market for U.S. ultra-filtered milk.

Brancel described the Wisconsin dairy industry as a family, saying, "family looks out for each other."

"This past month has shown how our dairy family can come together in challenging times to accomplish great things," said Brancel. "I am truly thankful for the efforts of the farmers, processors, milk handlers, lenders, agricultural organizations and our government partners. You are and always will be part of my family."

DATCP’s Wisconsin Farm Center continues to be available to assist farmers. Farmers can contact the Farm Center at 1-800-942-2474.

Read Wisconsin State Farmer version here.


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