Farmers worried over future of dairy industry following contract termination

Oversupply of milk leading to low prices

Area farmers are speaking out following the news that several Wisconsin Dairy Processors are terminating milk contracts with farmers.

Two weeks ago, several farmers in Wisconsin and Minnesota found out that their milk contracts with Grassland Dairy Products and Nasonville Dairy would be coming to an end.

It’s all because the milk they produce, a special filtered milk, will now soon be made in Canada.

Now, the president of the farmer’s union is speaking out, saying the move could have a ripple effect across the entire dairy industry.

Wisconsin Farmer’s Union president Darin Von Ruden knows a thing or two about the job.

“Wanted to milk cows instead of going to school when I was 5 years old, but mom and dad forced me,” Von Ruden said.

But he said the job for several farmers, since the termination of roughly 75 milk contracts across the state, may soon be in jeopardy.

“At this time, those farmers are looking for a new market for their milk,” Von Ruden said, warning it’s not just those farmers that are affected by the move.

“This is going to have a trickle-down effect to pretty much every sector that’s involved in the dairy industry,” Von Ruden said.

Von Ruden explains there’s already an oversupply of milk in the industry, which doesn’t leave displaced farmers with many options for new buyers.

“That milk is already going to go into another system, which forces that system to be oversupplied, so then their price drops even more yet,” Von Ruden said.

The price of milk is already low.

“We’re $3 to $4 short of what we need to stay alive,” Von Ruden said.

Wisconsin U.S. Senator Tammy Baldwin sent a letter to President Trump last week blaming Canada for unfair trade practices stating: “Canada must be clearly and swiftly reminded in a concrete way that dependable trading conditions between our two countries is critically important to their country as well.”

While the options are few, Von Ruden said farmers need to find options quickly, or be forced out of the profession entirely.

“At some point in time these cows are going to have to find a new home,” Von Ruden said.

Experts said it’s too early to see how the termination of these contracts will affect prices for consumers, but the move could force family farms in Wisconsin out of business, meaning less dairy production over time.

Von Ruden stated that all the overproduction of milk is bad for the industry and the U.S. needs to do a better job at maintaining supply levels that meet customer demand.