Regaining dairy crown should be on back burner

posted Dec. 18, 2017 10:31 a.m. (CDT)
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by / Jim Massey, Editor | jim.massey@ecpc.com

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A headline in a popular dairy industry trade publication has us a little concerned about the mindset of Wisconsin dairy farmers and processors.

The headline in the Dec. 1, 2017, edition of the Cheese Reporter reads, “Can Wisconsin overtake California in milk production?”

While it is instinctual to want to be No. 1 at something, in this case, striving to produce enough milk to overtake California as the nation’s leading milk producer could be a dangerous goal. After all, a previous production goal set by state government was partially to blame for the market fiasco that occurred earlier this year, when some Wisconsin dairy farmers were told they didn’t have a processor for their milk because of overflowing vats and lost markets.

California took over national leadership in milk production in 1993, when its production totaled 22.9 billion pounds of milk, compared to Wisconsin’s 22.8-billion-pound output. California continued to set new production records for each of the next 15 years, increasing production to 41.2 billion pounds by 2008.

Wisconsin’s milk production was relatively flat from 1993 to 2008, increasing to 24.5 billion pounds but falling farther behind California.

But since then, things have changed. California milk production reached its peak in 2014 at 42.3 billion pounds, but declined in both 2015 and 2016, according to the Cheese Reporter editorial. Meanwhile, Wisconsin milk production — encouraged by the state’s 30x20 program (a stated goal of producing 30 billion pounds of milk by 2020) — grew steadily, to the point that Wisconsin reached the 30-billion-pound goal in 2016.  

But where did reaching that goal get Wisconsin dairy farmers? It led to lower milk prices, when supplies exceeded demand, and it led to most Wisconsin dairy processors reaching their milk production capacity. Some dairy farmers lost their markets earlier this year when processors said they couldn’t take any more milk.

Not much has changed since the production glut overwhelmed markets in May — except that Wisconsin has lost another 504 dairy farms in the past year, the biggest one-year decline in years. The number of Wisconsin dairy farms now stands at 8,839.

So should the goal be trying to surpass California in milk production, or should it be stabilizing the industry in Wisconsin and somehow helping dairy farmers become more profitable and stay in business?

As the Cheese Reporter points out — and editor Dick Grove shouldn’t be blamed for writing about it since he’s just the messenger — it is possible that Wisconsin could regain its milk production crown at some point in the future, although it isn’t likely to happen anytime soon.

Since reaching its production record of  41.2 billion pounds in 2008, California dairy farmers have produced more milk some years and less in other years. Wisconsin’s milk production has increased every year since 2002, but during the second quarter of 2017, milk production was down 0.1 percent from a year earlier.

So even if California milk production continues to decline and Wisconsin milk production trends upward, it will likely take quite a few years before the 10-billion-pound difference is wiped out. 

In fact, if Wisconsin dairy farmers know what’s good for them, they had better hope they don’t regain the national milk production crown anytime soon. If they do, that will mean they are producing more milk at a time when their markets are telling them they can’t use anymore, and that will undoubtedly mean relatively low milk prices.

At a recent Professional Dairy Producers of Wisconsin seminar, a U.S. Dairy Export Council official warned the Wisconsin dairy industry that if milk production and consumption trends don’t change, the U.S. will be awash in milk by 2022. U.S. dairy farmers already produce about 22 billion pounds more milk than is consumed in the U.S., and in five years, that could increase to 32 billion pounds. That will make volatile export markets ever more important, and everyone knows exports can’t be counted on as a stable market for surplus milk.

If the North American Free Trade Agreement is renegotiated to create a greater barrier to exports to Mexico and Canada, the U.S. dairy industry would be in big trouble. 

For now, the goal should be for the Wisconsin dairy industry to hold milk production where it is until stable markets are found for the current supply and any possibility of future supplies. Overtaking California as the nation’s top milk-producing state shouldn’t even be in the conversation. 






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