Looking ahead to the 2023 Farm Bill, some western Wisconsin dairy farmers hope to see major change in federal dairy policy.

Dairy farmers involved with local Farm Bureau and Farmers Union organizations are talking about a mandatory national program that would change the focus from mass commodity production to one that would increase farm viability and profitability.

Yes, they are talking about a form of milk supply management, a Canadian dairy marketing practice that the U.S. dairy industry has long shunned.

The call for major policy reform is led by the Wisconsin Farmers Union and its Dairy Together initiative, which represents farmers across the country with herds large and small. Three information meetings were held in late March in Wisconsin, where Dairy Together leaders discussed reform options, including a program called the Dairy Revitalization Plan. The plan is based on research conducted by University of Wisconsin agricultural economists Chuck Nicholson and Mark Stephenson, and reported in the study Analyses of Proposed Alternative Growth Management Programs for the U.S. Dairy Industry.

Dairy policy reform necessary

“We need unity on our priorities for dairy policy reform as we head into the Farm Bill,” said Joe Bragger, an Independence, Wis., dairy farmer and member of the Wisconsin Farm Bureau. “To affect meaningful change, it’s going to take a strong coalition of farm groups and other industry stakeholders.” Bragger pointed out how drastically dairy farm numbers have fallen in his state. In the late 1990s, there were 20,000 dairy herds in Wisconsin. Today, there are fewer than 6,500.

Across the U.S., there are fewer than 30,000 dairy farms.

Nicholson presented the revitalization plan at the March 25 Chippewa Falls meeting, noting its flexibility — as it allows for new farm entry and planned production growth based on market conditions. In a nutshell, a growth management program for dairy farms would have two levers — base with allowable growth and a market access fee. If a farm produced more milk than its allowable limit, it would pay a market access fee. If a farm stayed under its growth limit, it would receive a market access payment (from the collected fee).

Using 2014-21 data and assuming implementation under the 2014 Farm Bill, Nicholson went through various scenarios and shared the projected impact on price and product. Overall, under a growth management program, there would be reduced price variation in farm milk prices and farm income; reduced exit of farms of all sizes; increased average net farm operating income for farms within allowable growth; reduced government expenditures; a slower rate of U.S. dairy export growth; increased dairy product prices; and a reduction in the growth rate of domestic milk consumption.

Nicholson also discussed different scenarios allowing new dairy farms to enter the business, and those new farms having a three-year grace period without market access fees. The point was made, too, that with the plan, production base would not have an asset value, which is a key criticism of the Canadian quota system, and that the plan is designed to work within federal milk marketing orders.

Dairy farmer and Farmers Union member Sarah Lloyd, Wisconsin Dells, Wis., gave a brief demonstration of an online Growth Management Program tool created by the University of Wisconsin Center for Integrated Agricultural Systems. The tool allows dairy farmers to key in their own numbers and see how such a program would affect their farms. Check it out at dairymarkets.org/GMP.

Evolving thought

The evolution of dairy farmer thinking to again consider some form production management was acknowledged more than once during the meeting. Bragger pointed out that the state Farm Bureau went from “willing to consider supply management” in 2018 to supporting the Dairy Revitalization Plan in 2021.

Karyn Schauf, Barron County (Wis.) Farm Bureau president, shared efforts of the Holstein Association from more than a decade ago when she was on its dairy legislative committee. A dairy stabilization program was in the works for the Farm Bill at the time but ended up getting dropped. The last few years she has been working with other dairy farmers to explore policy options, including supply management.

“We took the good bones of the Holstein Association plan and revised it, [collaborating with the university, Farmers Union and Farm Bureau],” she said. “We had a lot of opinions, and now we have facts. We have research behind it. … We need to decide what we want it to do.”

Learn more about the plan by watching a video of Nicholson and Stephenson explaining their research of growth management programs at Dairy Markets and Policy.

For more information on Dairy Together, visit dairytogether.com.