- The American Farmer has produced an abundance of food for the American public in such products as milk, meat, eggs, grains, vegetables and many more.
- Allowing the American public to only spend on the average 10% of their income on purchased food from the grocery stores and restaurants.
- Some countries in other places around the world will spend 25%, 50% up to 90% of their income for food.
- The American Dairy Farmer has become very efficient with the use of modern technology such as milking parlors, very comfortable housing for cattle, better feeding, breeding, health care and in general better animal husbandry.
- Because of the efficiency of production there is a fine line between too little and too much milk. Milk must be moved to processing plants every day into milk containers for retail sales or cheese, butter and powder for longer term storage.
- When there is too much milk, milk products must be exported to maintain a profitable milk price to the farmer. Then the US farmer competes with other farmers from around the world. At present 16% of the US milk supply as to leave the shores of the US.
- When the world and US supply of milk exceeds what is used the price goes down. At present the price on the average has been below the cost to produce milk therefore causing financial pain for farm families.
- In the past there has been a 3-year cycle of low and high milk prices. When the price is over the cost of production this allows farmers to recover from low milk price years by catching up on past due bills, replacing worn out equipment. The present cycle has now moved into a 5th year of low milk prices. This is causing hardship on too many farms.
- We in the US are blessed with a plentiful supply of food from our farmers. In a country like ours people should not be hungry. The US Department of Agriculture Farm Bill has a $428 billion-dollar budget. $326 billion-dollars is earmarked for the Supplemental Nutrition Program (SNAP) of which 47 million Americans or about 14% of the population benefits. Another 9% goes toward employment training.
- In the past dairy farms needed only to take care of their cows and crops. In most cases they made money.
- In the last 30 years margins have become tighter and they must monitor their balance sheets and cash flows more closely.
- A dairy farmer will have $10,000 to $25,000 invested per cow in their farm’s feed inventory, cattle, machinery, buildings and land. This huge investment requires borrowed money. On the average farmers will have 50% of their capital needs borrowed. Working with their lender is critical.
- There must be an annual business plan for good and lean years.
- As ownership equity slips away in low income years decisions must be made. How long to continue to farm, what to do or is it best to sell and preserve as much equity as possible. These are very difficult decisions to make and only the individual farm family can make them. Many farms have been in the family for generations.
- Talking about difficult financial situations with family, friends, church members and professionals is critical. Mental stress can have a devastating effect if not dealt with.
- Communities must think about the long-term effects of farms exiting in our rural land scape. Changes affect our towns, schools and churches. If the next generation does not farm what do our communities look like?
Dairy farmers are in crisis — and it could change Wisconsin forever - Milwaukee Journal Sentinel
Rick Barrett, Milwaukee Journal Sentinel – Mar. 25, 2019
Economic Impact of Crisis Felt by Ag and Dairy Lenders - Associated Press
An AP Member Exchange shared by La Crosse Tribune. – July 4, 2019
Farm to Table Supper - Catholic Rural Life Magazine
By Daja Gombojav
Impact of Agriculture on Wis. Economy
Wisconsin dairy generates $45.6b economic impact
Dairy industry supports 154,000 jobs in Wisconsin and generates $1.26 billion in state and local taxes.
Feedstuffs – Aug 14, 2019