Wisconsin Dairy Farmers Face New Canadian Competition and a Glut of Milk

Apr 20, 2017

Update, April 28:

The family featured in this story, the Sauer's, have signed a contract with milk processor Rolling Hills in Monroe, WI.

Update, April 27:

Most of the Wisconsin dairy farmers facing the May end to Canadian sales have found new processors to purchase their milk, according to the Dairy Business Milk Marketing Cooperative. Dozens had warned they would go out of business if they didn't find new buyers for their product. The state Dept. of Agriculture, Trade and Consumer Protection says it cannot confirm the cooperative's claim, at this time.

Original story:

Some Wisconsin dairy farmers could soon be forced out of business. In less than two weeks, Grassland Farms Dairy Products will stop purchasing what’s called ultra-filtered milk from about 75 dairy farmers in Wisconsin. 

The milk was being sold to Canada, but that country recently changed its pricing structure making the Canadian-produced equivalent cheaper. The immediate challenge is to find processors willing to take on new clients, but long-term, there’s too much milk.

“The technology, unfortunately, has been a double edged sword," Jennifer Sauer says. She and husband Shane own Sauer Dairy Farm in Waterloo, Wisconsin. It’s a small operation - 130 acres where alfalfa, corn and wheat are grown and there are around 130 milking cows.

Right now, the farm is quiet. The milking cows are content as they poke their heads under a fence to eat.

Across the country, dairy cows are eating more nutritious feed than ever before, while technology allows farmers to keep the cows at optimum temperature for milk production.

With the improvements in technology, it all adds up to a gigantic increase in the amount of milk Wisconsin's dairy farmers have been producing.

There have been other improvements as well. Jennifer Sauer says the dairy industry has been using sexed semen.

“It was to advance our genetics. A lot of people used it to expand their herd, to double their herd to get more heifers,” she says.

Dairy farmers have also been using an FDA-approved drug called BST to increase milk production.

“A lot of people use BST and gain that 10 pounds of milk per animal or more,” Sauer says.

It all adds up to a gigantic increase in the amount of milk Wisconsin’s dairy farmers have been producing. That’s the double-edged sword.

The Sauer's own 130 milking cows on a 130 acre farm in Waterloo.
Credit LaToya Dennis

Come May 1, the Sauer’s are one of 75 Wisconsin farms that will no longer have a buyer for their milk. They’ve been selling it to a processor who then sold it in Canada. But with Canada changing the pricing structure so that its own dairy farms can supply the product, it's left the Sauer’s looking for another processor. They are urging the Wisconsin dairy industry to figure out a longer-term solution for all the milk.

“If everybody would in reality give up 1 percent of their production - and I believe there’s around 9,100 farms that would give us enough to keep all 75 farms. And if you think about it, 1 percent is not a whole lot,” Sauer says.

Wisconsin has never faced a situation where milk produced here had nowhere to go.

Ben Brancel, Wisconsin’s Secretary of Agriculture, Trade and Consumer Protection says, “We are communicating with processors, we’re communicating with bankers, we’re communicating with the farm organizations. We have sent letters to Washington D.C. requesting support and help to clear product off shelves that can go through some of the feed the poor programs that are available in both the national and international market."

Wisconsin has never faced a situation where milk produced here had nowhere to go, he says.

While President Trump called out Canada this week for not adhering to fair trade practices, Brancel says there’s another way Washington could help. “One of the frustrations we have in Washington is some of the people that could be helping us have yet to be confirmed by the Senate even though they’ve passed through committee. So the U.S. Trade Representative is still awaiting confirmation as is the Secretary of Agriculture,” he says.

Back on the farm in Waterloo, the Sauer’s seven-year-old son drives past on a Bobcat. “He makes me nervous sometimes but he’s also very involved in the farm. He’s got cows already in here that are his. And it breaks his little heart. He’s held a lot of tears back,” Sauer says.

Held back tears, because the Sauer’s say, if they haven’t found a new processor by May 1, they’ll have to sell their milking cows

“You worry. It’s not a day went by you don’t shed a tear, not a day goes by that you don’t make that phone call to those same processors asking what do you have available, do you have a spot available?” Sauer says.

Mom Jennifer says she hopes all farmers realize the situation with Canada can become more far-reaching.

Husband Shane agrees. “This is one thing you never would have expected to happen, ever. And if I was a dairy producer that is not facing this right now, better tighten your belt because it’s coming if we don’t fix this right now,” he says.

If there is no solution by May, the Sauer says they’ll try to keep the youngest members of their herd. It’ll be two years before they can begin producing milk.

One of the Sauer's dairy cows.
Credit LaToya Dennis