In tonight's look ahead, while it's not been confirmed by state
ag officials, reportedly most of the dozens of Wisconsin dairy
farmers left without a buyer for their milk have now found
processors.
Just ahead of being cut off May 1st.
It was April 1st that their processor told about 75 farmers
they could no longer buy their milk blaming curtailed Canadian
imports.
Since then other processors have picked up contracts.
But for any farmer not picked up the choices are bleak.
Going out of business or dumping their milk.
The farm family we spoke with earlier this month did find a
processor just in time.
In trying to address the situation, Governor Walker
announced this week the Wisconsin Housing and Economic
Development Authority will offer more favorable loan terms to
dairy farmers and processors allowing them to access capital.
The larger takeaway of all of this from the owner of a small
farm near Stevens Point is that quote dairy farmers are simply
producing too much milk.
Chris Holman is also a district director for the Wisconsin
Farmers Union.
Thanks for being here.
>> Thanks for having me.
>> These farmers just went through a very anxious time,
perhaps a few will face some very difficult choices without a
buyer for their milk.
First tonight your response to them.
>> Well, it's been kind of a raw deal for them in the sense that
they got that letter out of the blue.
So the only thing I can say for them is that thankfully there
are a lot of people working really hard trying to find
solutions for them.
Hopefully they're long-term solutions and obviously
everybody is hoping the best and that they'll all be able to keep
milking.
>> As we noted your takeaway in all of this is that Wisconsin is
producing too much milk.
Describe what you call
the vicious cycle of over production.
>> Sure.
Well, when the price of milk is up people often want to produce
more milk so that they can take advantage of that, which makes
sense.
But then also when the price goes down, production will go up
because you need more to cover your bases, pay your bills,
things like that.
In either scenario you are producing more and more milk.
Now if markets are down and you flood the market, then prices
also go down like we have now.
It kind of exacerbates the problem.
>> But meanwhile Wisconsin has been promoting more milk
production.
How so?
>> In 2012 the governor put the dairy 30 by 20 program in
encouraging farmers to meet 30 billion pounds by the year 2020.
I believe we met that last year so we've certainly exceeded all
expectations there.
However, that program also seems to have exacerbated the problem
once again in the sense that despite all the volatility in
milk markets year to year in the past and presumably into the
future, the message from, at least that program at the state
level, was to keep producing more and more despite the fact
there was not a place for it to go.
>> Who wins under that program of trying to initiate more
production of milk?
>> Well, it's a tough question.
In a sense the people who are able to weather the storms
better are generally speaking the larger farms who often can
produce at lower cost of production and they tend to have
more advantages with banks.
They can kind of float themselves through tougher times
and Wisconsin is losing over a dairy farm per day without any
of this situation anyhow.
That production then gets picked up by those farms.
>> So is this just the price of progress and modernity with
these larger farms?
>> A lot of people look at it that way.
If you think of it strictly in terms of efficiency, then yeah.
But then why not just have one big dairy farm somewhere in the
center of the country.
Realistically what we are looking for is the rural
America.
These farms are kind of the backbone for rural America.
If they disappear so does rural America along with the
infrastructure and everything that's in place and has been
dwindling somewhat over time but is something that farmers at all
scales benefit from.
>> If we could find new or growing markets for the milk it
would pay off presumably.
How are we doing on that score finding new markets?
>> That's a great question.
You know, exports are up, so in terms of finding markets, there
seems to be places for it to go.
Though a lot of the expectations coming out of China were not met
and then couple that with the European milk coming online and
dropping its quota system and bans of imports through Russia.
Globally you have a glut situation where there is a lot
of milk and despite any sort of improvements in the American
market for exports we're still saddled with a bunch of milk
being dumped.
A lot of milk being processed at full capacity everywhere you go.
Ultimately speaking, it's just a situation with no end in sight.
>> Do you think the new WHEDA loan terms the governor
announced will help?
>> Potentially they could help some.
I'm personally not a big fan of trying to find ways to loan your
way into the future.
If you are highly leveraged it makes you more vulnerable
and in the farm crisis of the 80s that was a big deal
with high interest rates.
Interest rates are low right now and it's not exactly like the
80s.
If you continue to encourage people to leverage themselves,
then they kind of get stuck on the treadmill of sorts,
trying to pay off those bills, pay off those loans.
And if there is no markets and no place for your milk to go
anyway, then it's kinda all for naught.
>> Chris Holman, thank you very much for joining us.
>> Thank you, too.