Hard times are nothing new for Wisconsin dairy farmers, but the coronavirus crisis has created an even bleaker outlook for the state’s flagship industry.
(CN) — Jake Gehring lives on a 500-acre dairy farm situated in the same pocket of Wisconsin’s Kettle Moraine his ancestors staked out in 1856, making him the sixth generation to operate Gehring Stone House Dairy in the small town of Hartford, which he runs with his wife, Molly, and father, LeRoy.
Gehring’s 5-month-old daughter, already a fixture in the milking stalls, would be the seventh generation should she choose to take up the family mantle.
For Wisconsin dairy farmers, however, the future is uncertain. Hard times are nothing new, but the myriad impacts of the Covid-19 pandemic, coupled with preexisting marketplace strains largely outside farmers’ control, paint a dire picture for the $45 billion dollar a year flagship industry in America’s Dairyland.
The decline of the small, family-owned Wisconsin dairy farm has occurred over the last half century, fueled by a global surplus of milk driving down prices, the competition of gigantic megafarms milking thousands of cows, costly tariffs and trade wars, and shifts in consumer taste toward dairy alternatives like soy and almond milks.
Wisconsin lost more than one-third of its dairy farms between 2011 and 2018. In 2019 alone, 818 dairy farms shuttered, a disappearance of more than 10% of the state’s dairies at a rate of roughly two per day. Wisconsin leads the nation in farm foreclosures and has seen a troublingly steady rise in farmers dying by suicide in recent years.
Then Covid-19 tore across the world, tanking markets, limiting movement and snarling supply lines, which include the now partially shutdown food service industry where more than half of Wisconsin’s dairy goes.
This leaves farmers like Gehring, whose herd clocks in around 185 cows, stuck with huge quantities of unbottled, unpasteurized milk, for which they still have to pay fees to state and national dairy cooperatives but cannot sell or give away.
The 26-year-old Gehring laid out in an interview that “our expenses are all the same but our most recent pay was half.”
Tom Oberhaus, who operates Cozy Nook Farm in Waukesha with his wife Joan, is in a similar situation. Before Covid-19, the milk from his 80 dairy cows sold for about $17 per 100-pound parcel, or hundredweight, but post-coronavirus that same hundredweight only brings in about $11.
“To put that in perspective,” Oberhaus said, “it’s like saying ‘now we’re requesting you to continue coming to work but instead of a paycheck on Friday we’re handing you a bill.’”
Oberhaus estimated the current coronavirus maelstrom is causing him to hemorrhage about $300 per day.
Both Oberhaus and Gehring admitted they have made next to nothing off dairy in recent years, necessitating side hustles to make ends meet. Oberhaus seasonally sells pumpkins and Christmas trees, while Gehring moves 30 acres of winter wheat when the time is right.
With prices too low and supplies too high, some farmers have been faced with the agonizing choice to dump thousands of pounds of surplus milk, although neither Oberhaus nor Gehring have had to do so yet.
All of which begs the question: what is getting done at the state and federal level to assist farmers in crisis? What can be done?
At the state level, Democratic Governor Tony Evers and the GOP-controlled Wisconsin Legislature eventually overcame their public-facing animosity and worked on broad farm aid legislation after Evers called a special session on the matter in January.
That legislation, which featured property tax credits for farmers and other financial aid, passed the State Assembly and went on to the Senate, where it waits today.
Wisconsin also earmarked $8.8 million in annual funding for the state’s Dairy Innovation Hub, a coalition between divisions of three Wisconsin universities dedicated to broadly-defined dairy research, in the 2019 biennial budget over which the governor and the legislature are still fighting in court.
Mark Stephenson, professor and director of dairy policy analysis at the University of Wisconsin, cautioned that “at the state level it’s really difficult to do anything to address the situation,” while pointing out that the state Department of Agriculture, Transportation and Consumer Protection, or DATCP, “has been massively busy…doing everything they can to grease the skids to make sure the dairy supply chain is working well under extreme conditions.”
Moves like the Dairy Innovation Hub investment are all well and good, Stephenson says, but “all the stuff that’s been done so far was looking at this long term.”
According to DATCP spokeswoman Grace Atherton, the agency has partnered with state dairy cooperatives like Dairy Farmers of Wisconsin to offer farmers information and resources to connect the dots in the supply chain during the current public health emergency.
Atherton noted in an email that the state-level Covid-19 relief bill known as Wisconsin Act 185, passed by the legislature and signed by Evers in mid-April, “did not include any provisions to provide assistance or relief to farmers.”
DATCP has also petitioned the federal government for relief, including in an April letter to Agriculture Secretary Sonny Perdue asking for direct aid and commodity buybacks in an attempt to slow the bleeding.
In turn, the USDA and President Donald Trump’s administration earlier this month announced a $19 billion emergency aid package for farmers, which includes $16 billion in direct payments as well as $3 billion reserved for buying back and redistributing surplus products. Perdue has said he hopes the money will start flowing by the end of May.
Atherton said rollout of the recent $2.2 trillion CARES Act and the Small Business Administration’s Paycheck Protection Program caused initial confusion for farmers and agri-business owners, leading to delays “which ended up being a missed opportunity for some who might have benefited from these programs.”
Helpful as all that aid potentially is, just about everyone involved, from industry experts to bureaucrats to farmers, seems to agree that the terms and strategy for channeling those dollars to those in need is foggy at best.
Both Gehring and Oberhaus said they have no idea how much of that relief is coming to them and when, with Oberhaus saying “it’s as clear as mud as to what that boils down to for us dairy farmers.”
Larger dairy marketing cooperatives like the Kansas City-based Dairy Farmers of America, or DFA, reported famers dumping milk as a last resort in April, but have also coordinated pumping hundreds of thousands of dollars into initiatives to get surplus milk to local food banks for consumption, and have put pressure on grocery stores and supermarkets administering restrictive limits on dairy purchases and reporting dairy shortages when farmers have milk that cannot get off their hands.
Stephenson offered that while both the cash payments and buybacks should help farmers, putting cash in their hands does not really address the heart of the problem.
The bottom line, according to Stephenson, is simpler.
“Stop producing as much milk,” he said. “We have to tap on the brakes.”
Gehring, whose farm churns out around 16,000 pounds of milk per day, said that DFA asked him to cut back his production by 10% in response to the Covid-19 market drubbing, leaving him to find a way to winnow down 1,600 pounds of milk daily.
Cows do not watch the markets, though, and they cannot just make less milk on a dime. Gehring’s wife Molly explained that due to the cows’ complicated lactation cycles, in reality it could take up to 10 months to encourage slower milk production in part by altering cows’ feeding routines.
Another avenue is herd culling, which Gehring has done, recently bringing his herd from 200 down to 185. Stephenson explained culling could be incentivized by offering bonuses on cows that are removed through herd reduction programs like one the federal government implemented during a dairy crisis in the 1980s.
But sending culled cows to beef processing plants, for instance, may not be an option in the era of Covid-19. Meat processing plants nationwide, including the JBS plant in Green Bay, temporarily shut down this week amid spikes in infections linked to the plants’ operations.
Dairy farmers treading water often field well-intentioned questions on why they continue, as if the choice to uproot from centuries of bloodline tradition is the remedy for shockwaves from a global pandemic few could envision.
Gehring said in an email that both he and Molly grew up on farms and “are happy to continue that with our daughter as long as we’re given the opportunity.”
“Family farming builds strong family relationships and teaches you hard work, as well as to appreciate what’s around you,” Gehring said.
Barring resolution of a lawsuit from the GOP-controlled Wisconsin Legislature before the state supreme court over an extension to the governor’s safer-at-home order, for now the Badger State’s partial shutdown extends until Memorial Day weekend. The Evers administration has proffered turning the dial on certain restrictions for nonessential businesses as the pandemic abates and has laid out reopening the state for business in phases, neither of which have appeased state conservatives lacing into the Democratic administration for a quicker return to normalcy.
No matter what, for dairy farmers in the crush of Covid-19, the situation is unprecedented and the future is bargained for on a daily basis.
“I’ve never seen anything quite like this,” Stephenson said. “We’re sort of trying to stumble our way toward a solution and there’s none that are really a good solution, just ones that might be worse.”