Dairies Still Hurting
By Charles A Hice
Another month, another quarter, and another 300 dairy farmers call it quits. Its no question that the dairy industry has been hurting that last few years. This year’s trade policies and regulation overloads have done little to help the fledgling industry.
This last year alone, more than 500 dairy farms in Wisconsin were said to have closed down. The situation is dire across the country. California dairy is expected to decline another 3-5% approximately by year’s end as well. California, however, does appear to be weathering the storm a bit better than other parts of the country. The sharpest decline appears to be focused on smaller operators.
Even the banks seem to be turning their backs on parts of this industry, as smaller dairy farmers see the money wells dry up that they once depended on. Farming in general is a business that relies in some cases on debt to sustain and grow. It’s the nature of most businesses to have some deficit, and dairy farms are no different. They require a certain amount of cash loans in order to operate to the next season.
However, it appears it’ become more and more difficult for some to find the life blood that is cash in order to continue operating. This has prompted an interesting move for some… Some dairy farmers have begun to ask for support with crowd funding apps such as Go Fund Me.
Dairy farmers Dale and Karen, having been rejected yet again by another bank and seeing another farmer friend shut down, decided to try Go Fund Me for help.
According to a Fox news contributor, Karen set up the page and wrote,” “I am asking for help to keep [our] small family dairy farm going. My husband is to[o] proud to come on here, but my gut says give it a try.”
At first they didn’t expect much from the crowd funding page, but set a goal of $35,000. Their story hit a nerve with people from around the world, and shortly they met that goal, and as of the writing of this story, they have exceeded $75,000 in funds. It’s an amazing and touching story of support.
Unfortunately, it may be only a bit of time buying for one family, and this isn’t a model that can really help the industry as a whole. With rising tariffs, over production, decline in demand, and a lacking business model – dairy farmers across the US are feeling the pain.
Dairy farmers were among the first to feel the effects of the increased trade war activity. An unfortunate irony, considering they are part of the base of the current administration. As increased measure of trade wars are being created, farmers of all kinds look on with hopes that the Trump administration can resolve some of these issues in the trade war talks. Even before the trade wars, dairies were hurting.
Now, tariffs on Canada, Mexico and China have created retaliatory actions from those countries. This has led to a glut in supply, a decrease in price, and nearly 1.4 billion pounds of milk product in cold storage just waiting to be dealt with.
Annie AcMoody, an economic analysis for Western United Dairymen, stated, “A lot of farms have been hanging on by a thread in California, hoping for a price increase.” She concluded that by the end of the tariff war, we will see even more dairies run out of business.
However, Dairies throughout California have tried to unite and join others nationally in an attempt to urge the Trump administration to tone down some of its policies regarding tariffs.
Though Wisconsin has seen some intense losses and is known as the “Cheese State,” it is California that is the nation’s number one dairy producer. And as such, California may have the most to lose. Its widely understand the California’s government makes it difficult enough to run an Ag related business (or business of any kind), and now to add this added stressor of tariffs and global competition could create a extreme situation.
Can dairies offer lower prices to combat this, despite increased costs and risks?
By Charles A Hice
Ag Expo Mag Contributor and Editor
