Local dairy experts say processing giant bankruptcy a sign dairy industry needing change

Consumers may see higher prices amid Borden bankruptcy

WESTBY, Wis. (WKBT) – Another dairy industry giant is filing for bankruptcy and it could force consumers to pay more at the grocery store. The health of America’s Dairyland is not a secret.

“We’ve lost just about 1,500 dairy farms in the last two years,” said Wisconsin Farmers Union President Darin Von Ruden.

La Crosse County’s dairy industry has taken a big hit in the past five years.

“We’ve seen half of our farms just in La Crosse county either transition to something else, such as beef, or get out of the business,” said Kaitlyn Lance, an agricultural educator for La Crosse County UW-Extension.

Wisconsin is not alone. The industry is struggling around the country. Borden Dairy Co. produces 500 million gallons of milk each year and runs 12 plants across the U.S.
Borden joined Dean Foods as the second major dairy producer to file for bankruptcy in two months.

“Now we are starting to see the processors start to struggle,” Von Ruden said.

Companies such as Borden are privately owned and traded on the stock market. He said overspending is one cause of the problem.

“Sometimes CEOs get paid way too much in those situations,” Von Ruden said. “Those dollars should be put back into the company to make sure they are viable.”

The consolidation of family farms isn’t helping.

“If you have a weak base you have a week company structure,” Von Ruden said.

Farmers haven’t been getting the right price for their milk. One cause is the amount of liquid milk consumed per capita in the U.S. has declined more than 40% since 1975, according to the Associated Press.

Farmers are facing tough economic situations forcing many of them to produce one product. Lance said those farmers have no back up when the economy takes a turn.

“If we are just doing one type of commodity you’re at the mercy of the economics of it,” Lance said.

Few local dairy farmers will be affected by this new bankruptcy. However, those of us who still buy dairy products may see the effects at the check out counter.

“Because consolidation usually the raw material is paid less and the consumer is charged more,” Von Ruden said.

If things don’t change with the current model of agriculture, Von Ruden says America’s Dairyland will become land with a lot of empty barns left behind.

“We are going to continue to see this loss for the next 10 years or so until we are all gone,” Von Ruden said.

Von Ruden said the Wisconsin Farmers Union is working on a supply management program to find a different business model.

Officials with the local UW-Extension will be hosting a program for farmers on Jan. 29th. The program will teach farmers how to set their farm up for success in the future.