The University of Wisconsin System organized the Wisconsin Idea Dairy Summit June 19 at the Alliant Energy Center in Madison. Nearly 200 farmers, industry leaders, university professors and others attended the six-hour meeting.
The idea for the summit was prompted by what happened when Grassland Dairy Products Inc. sent letters to some 75 Wisconsin and Minnesota dairy producers on April 3 telling them they had to find a new market for their milk by May 1. Fortunately, new milk processors were found before May 1 for all but one or two of the displaced farmers, but not without a lot of anguish.
The dairy summit was the first UW System Wisconsin Idea Summit; it will be followed by other listening sessions held across the state later this year and in following years.
The Dairy State
UW System President Ray Cross said it was an easy choice to focus the first summit on Wisconsin’s dairy industry. He believes the nation and the world look to Wisconsin for leadership when it comes to the dairy industry.
“Wisconsin leads the nation in dairy, and we should have the ideas,” Cross said. “People come to us because we are the best. If we’re going to be the Dairy State, then we need to live up to that.”
Cross said coming up with solutions to prevent what happened with Grassland Dairy, or something like it, from happening again requires ideas from all corners of the dairy industry.
“The university may have organized this summit, but we know we don’t have all of the answers,” Cross admitted. “By bringing all of the stakeholders together, we can come up with solutions.”
During the summit, 18 university, agency and dairy organization representatives shared their thoughts about the status of Wisconsin’s dairy industry.
Wisconsin Agriculture Secretary Ben Brancel said this spring there was a high volume of milk coming here from out of state at below market price.
“In April we had a wake-up call,” Brancel said. “We have always had enough milk processing capacity to process all of our milk, but this was different.”
Dan Smith, administrator for the Wisconsin Department of Agriculture, Trade and Consumer Protection’s Division of Agricultural Development, told a story about a state farmer he talked to.
“One dairy farmer told me he survived record-low milk prices in 2009 and the drought in 2012,” Smith recounted. “But he said, ‘What I can’t survive is if nobody picks up my milk every day.’”
John Umhoefer, executive director of the Wisconsin Cheese Maker’s Association, said, “The solution to having more stability in Wisconsin is not about building another plant. The problem is not too much milk — it’s about marketing and packaging products the way consumers want them.”
Umhoefer offered “10 polite suggestions” on what could be done to help stabilize Wisconsin’s dairy industry:
1. Expand research and development. Wisconsin does not sink enough dollars into research and development. The state needs more diversity in its offerings.
2. Grow sales and marketing. Processors need to bring on more marketing employees to figure out what consumers want.
3. End federal pricing. It stifles the development of new products.
4. Unite production and processing. The dairy industry spends 90% of its energy on procuring milk, and only 10% on marketing.
5. Embrace all species. That includes goats and sheep.
6. Build branding expertise. Wisconsin processors should pursue new products.
7. Figure out manure. The state’s “moon shot” should be to harness the nutrients in manure while eliminating odor.
8. Own sustainability.
9. Be transparent. Dairy has nothing to hide, and the industry should market that and sell it to the consumer.
10. Make the best. “We are Wisconsin,” Umhoefer said. “We can make the best.”
Umhoefer disputed that Canada’s decision to stop buying 1 million pounds of ultrafiltered milk daily from Grassland Dairy is at the root of the Wisconsin dairy industry’s problem.
“The problem is not Canada,” he said. “It is the consumer.”
John Holevoet, executive director of the Dairy Business Association, echoed what Umhoefer said.
“I think we need to find a market or create a market,” Holevoet said. “We may need to change our products or create a new product that we haven’t even thought of yet.”
Sarah Lloyd, special projects coordinator for the Wisconsin Farmers Union and a Wisconsin Dells dairy farmer, said Wisconsin has been in “full-throttle agriculture” in recent years, with no brakes on milk production.
“We have families who are struggling to pay bills,” she said. “Historically when farmers who milk 250 to 300 cows can’t pay the bills, they go to their banker and he says, ‘Why don’t you milk some more cows?”’
Lloyd said dairy farmers are struggling. “They are worried about the future of their farms,” she said. “We need to work on ideas to help get farmers off the debt treadmill. We are losing the medium-scale farmers. We have a good story to tell, and we need to tell it. We need to figure out how farmers can keep farming. We can have a bright future, but we have to work together.”
UW-Madison director of dairy policy analysis Mark Stephenson said its human nature to simplify a problem like the Grassland Dairy oversupply issue last spring.
“Isn’t it nice to blame somebody not even in our borders?” he said. “The Canadian government did what they needed to do to preserve their system. But it was an easy blame.”
Mitch Breunig, Sauk County dairy farmer and president of the Professional Dairy Producers of Wisconsin, said the state needs all types and sizes of dairy farms working together.
“We need organic, we need robotics, we need commercial dairies, we need people doing genetics, we need on-farm processing,” he said. “We need to talk to consumers with a single voice so they’re not confused.”
Breunig suggested developing a system where “we bring in brilliant researchers and let them be brilliant. Sixty-five percent of the human population cannot digest milk,” he said. “Can we do something to change that?”
Jen Walsh, director of market research at the Wisconsin Milk Marketing Board, said it is important for dairy farmers to listen to consumers and understand what’s important to them.
“Millennials are the biggest generation,” Walsh said. “There are more millennials than baby boomers. Their tastes in foods are far more adventurous.”
She added, “If you listen to consumers and understand what’s important to them, you have a far better chance of giving them what they want.”