Slumping milk prices force dairy farmers to think outside the barn

Twelve years ago, Terry Edge, in his mid 20s and descended from Wisconsin dairy farmers, turned his back on the family business and took a job in construction. It didn’t last long. Six months later he bought 50 cows, moved them into his grandfather’s old barn, and threw himself into the subtleties of cow breeding, determined not just to follow the old dairying life but to improve on it, raising animals that were healthier and better suited to grazing on the lush green hillsides of southwest Wisconsin.

“I went that route thinking it would help me make ends meet,” he says. “But it didn’t work out that way.”

Now Mr. Edge has come to the end of the line. He sold most of his cows at an auction last month, undone by a stretch of low milk prices that has lasted 3-1/2 years and imperiled dairy farmers across the country.

Some like Edge are being forced out of the dairy business. For others, the hard times are focusing new attention on strategies that go beyond just milking cows in big barns, such as making cheeses or switching to goats or sheep. ​And some farmers, pointing to a quota system of production in Canada that keeps milk prices more stable there​, say new policies might be the answer​.

“This is probably the biggest challenge dairy farmers have faced in their lifetime,” says Darin Von Ruden, a dairy farmer and president of the Wisconsin Farmers Union.

Overproduction worldwide has yielded a glut of milk, driving prices below what farmers say it costs them to produce it, for months at a time. Farmers are used to fluctuations in milk prices, but previous downturns have usually lasted only a year or 18 months.

The US Department of Agriculture predicts that milk prices will rise this year and into next. But no one expects a big increase. The Trump administration’s trade disputes and the prospect of trade wars involving agricultural products have only deepened the uncertainty.

‘Running as fast as we can’

As this downturn reaches the middle of the fourth year, many farmers are struggling just to hang on, borrowing against land and equipment to pay their bills, betting the farm that prices will turn.

“Once you’ve invested a million dollars in a milking parlor, you’re going to milk cows,” says Sarah Lloyd, a farmer in Wisconsin Dells. The result, she says, is that “my husband and I are on the treadmill and we’re running as fast as we can. That’s happening to a lot of families.”

Not all farmers are struggling. Some have managed to pay down debts. And, as in other types of farming, large operations often enjoy economies of scale. Big farms can run milking parlors around the clock and negotiate discounts for things like feed and breeding services.

Wisconsin alone lost about 5 percent of its dairy farms between 2016 and 2017. Just 15 miles west of Edge’s farm, William and Kelle Calvert had gone into debt to buy a 450-acre farm, and gave up dairying because they were afraid of losing everything. They sold their cows to save the farm. Now they cash-crop corn, soybeans, and hay and raise a few animals for other people.

“We had a good sale,” says Mr. Calvert, who now works at an agricultural feed company. “There were tears shed, but we felt it was a good day.”