Vol. 75/No. 38      October 24, 2011

Wisconsin, the second largest milk-producing state in the U.S., has seen scores of dairy farmers go out of business. It now has 11,993 dairy farms compared with about 14,600 five years ago, according to the state Department of Agriculture.

Small dairy farmers haven’t caught up since 2009 when they were hit by a perfect storm of high input costs and low prices paid by distributors for their milk. Prices fell from around $18 per hundred pounds in 2008 to about $12 in 2009.

Milk prices paid to farmers have returned to the 2008 level, but many went out on the limb to hold onto their farms and are now saddled with enormous debts.

“For most dairy farmers this means we are keeping up, but far from catching up,” said Randy Jasper, a soybean and corn farmer here. “I know this firsthand because my son owns a dairy farm and he is barely breaking even. It’s not a whole lot better for grain farmers.”

“I can’t even count the number of people I know who are going to quit milking cows,” Joel Greeno, a dairy farmer from Kendall, told the Journal Sentinel.

“While milk prices are somewhat better,” said Jim Goodman, an organic dairy farmer from Wonewoc, “we still face high input costs. Feed costs are really high, whether it’s grain or hay. Plus this year has been a dry one and our yields are lower.”

Dairy farmers in particular are adversely affected by government subsidies to ethanol, which led to a big demand for corn among biofuel producers. Prices for corn feed, which account for a large portion of dairy farmers’ expenses, have gone through the roof.

Prices of fertilizer, fuel, seed and machinery are also high.

Jasper said he recently had to dish out more than $800 for air filters for his combine. “Just for air filters, can you believe it?”

Goodman pointed to yet another input—the price of land. “Whether you buy or rent it, the prices are way up there,” he said. According to recent bank reports, the price of farmland across the Midwest has risen dramatically. In parts of Iowa, prices rose as much as 23 percent last year.

“Dairy farmers lost one-third of their equity in 2009 alone, with hundreds and even thousands of dollars being lost per cow,” said a recent Tufts University study titled “Still Waiting for the Farm Boom.”

In Minnesota banks sent out 3,700 default notices to farmers, an 80 percent increase over recent years.

Many working farmers depend on nonfarm income from their spouses or other family members, who often work in nearby factories, hospitals or other businesses. This income in the rural areas too has been hard hit by the capitalist crisis. “This is sometimes not noticed as much,” said Goodman, “but many farm families have been hit with layoffs, just like in the cities.”

This is one of the reasons that some farmers joined the big labor protests in Madison last winter, said Goodman. “Our interests are more in common because we are beaten down by big business just like workers. We both need solidarity.”  
 
 
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