After spending his entire adult life as a dairyman, Joe Lieffring of rural Eau Galle in Dunn County sold his cows at auction on Thursday. Lieffring, standing with his cows the day before the auction, said the weak dairy economy drove him out of the business.
After milking cows for 46 years, Joe Lieffring said he can sum up today’s dairy economy in two words: “It sucks.”
Lieffring, 54, is so fed up with working long hours for meager, if any, reward and so pessimistic about the industry’s future that he is getting out.
He sold his cows — 52 Holsteins and three Brown Swiss — in an auction Thursday at the southern Dunn County farm where he has toiled for the past 14 years.
“There is no money in it,” Lieffring said. “If you are breaking even, you’re doing a good job.”
The same conditions driving Lieffring from the signature industry in America’s Dairyland led to 400 Wisconsin dairy farms going out of business in 2016 and recently prompted Wisconsin Farmers Union President Darin Von Ruden to label the situation a “farm crisis.”
The difficult year stems from chronically low milk prices, as local farmers now report receiving about $16 per 100 pounds.
At that price, a growing number of dairy farmers are coming to the same painful conclusion: It’s just not worth it anymore.
“Any time you’re losing 400 farms in a year in a state like Wisconsin, something serious is going on,” said Kara O’Connor, government relations director for the Wisconsin Farmers Union.
Due in part to dairy policy that fails to incentivize limiting production when supply is plentiful and an increase in international trade and speculators trading dairy futures, milk prices have gotten increasingly volatile since the 1980s, O’Connor said.
“If you look at a graph of average milk prices over the last 30 years, it starts out looking like the heartbeat of someone taking a walk, and lately it looks more like the heartbeat of someone taking a sprint,” she said.
Elk Mound farmer James Holte, president of the Wisconsin Farm Bureau Federation, said prices for milk and many other commodities are considerably lower than they were a few years ago, but other expenses have continued to rise, making it increasingly difficult for farmers to make ends meet.
“Farmers tend to just bend into it and work harder when these times happen, but as individuals there is very little we can do about it today when every market is a global market,” Holte said.
‘Pointless’
For Lieffring, who moved comfortably between two long rows of cows in the dairy barn awaiting their turn to contribute to the 9,400 pounds of milk he sold to Ellsworth Creamery every other day, the decision to leave the business to which he has devoted his entire adult life was not that difficult, he said.
Though he enjoys many aspects of the farming lifestyle, it came down to a business decision. Ultimately, he decided the pluses no longer outweighed the minuses.
“Farming is a grueling job, and it’s seven days a week,” Lieffring said. “So to work your ass off seven days a week and not make any money, it’s pointless. Honestly, it’s almost stupid.”
Yet Lieffring said he was doing better than most small dairy farm operators, most of whom he believes are losing money.
That view is supported by a WFU survey of dairy farmers last fall in which 63 percent of respondents reported a negative profit margin, meaning their cost of production exceeded the income they received from their product. In the same survey, when asked how confident they were that they or someone else in their family would still be farming in five years, the most common response was “not at all confident.”
Lieffring said he was earning enough to pay the bills, but that was it.
“I have very low overhead and one of the top herds in Wisconsin, and I’m not making a dime,” said Lieffring, who operated the rural Eau Galle dairy in a partnership with Roger Weinzirl, who rents the 240-acre farm from his father.
The scenario with Lieffring seems all too familiar to Weinzirl, who after leaving the dairy industry himself had a similar arrangement with another dairy farmer from 1992 to 2003, when poor prices pushed that operator out of the dairy barn.
Since then market conditions have only gotten tougher, Weinzirl said, stopping for a moment to chat in a doorway where a breeze kept the mosquitoes temporarily at bay.
“The ups get shorter, and the downs get longer,” said Weinzirl, who plans to continue raising corn, beans and alfalfa on the land his father has owned for 51 years even though prices for those crops are low as well.
For Lieffring, who lives three-quarters of a mile away from the dairy barn that housed his cows, the futility of his labor hit home when he watched people with boats and campers drive by the rolling green hills surrounding the farm on their way to enjoy some leisure time as he headed back to the barn for more chores.
“My whole life I’ve never had any time off to speak of,” he said, noting that it’s nearly impossible to find — or afford — good help anymore.
As for what his dairy-free future holds, Lieffring said he isn’t sure yet, a prospect he acknowledged is unsettling after the routine of life on a dairy farm. He plans to take a couple of months off and explore his options.
Supply and demand
Jeff Peck, who operates a Chippewa County farm near Cadott with 180 milking cows and 1,150 acres of crops, understands the frustrations associated with running a dairy farm in an era of what he described as unsustainable milk prices.
“If you’re lucky, you break even,” Peck said. “It’s so tough because you get the most bills this time of year, and you know your milk check won’t make up for it. You’re hoping the weather cooperates and you get a crop so you can sell it to pay off your bills.”
Oversupply, which is the root of the price problem, puts farmers in a difficult predicament: When milk prices are high, farmers want to produce as much as they can to increase their earnings, and when prices are low, they feel compelled to produce as much as possible to maintain enough income to keep going.
“That’s the kind of vicious cycle that keeps happening,” Peck said, noting that high production levels are good for everyone in the supply line except farmers.
The best solution in the long run would be to have prices stabilize at a sustainable level, said Peck, 32, who has been a dairy farmer for a decade. That would allow farmers to plan ahead and know when they could afford to invest in their business.
Crop farmers have the advantage of being able to store their product and sell when prices are higher; that doesn’t work for milk with its limited shelf life.
Agricultural experts said market conditions make it harder and harder for small and medium-sized dairy farms to stay in business, leading to more consolidation in the industry.
“Size does matter,” Holte said, “and larger farms do tend to be more efficient.”
That trend has held true in Eau Claire County, where UW-Extension agricultural agent Mark Hagedorn said the cow count has remained steady at the same time the number of producers has gone down since he arrived in the county four years ago.
Quality-of-life factors also are behind the shift to larger farms, sometimes run by multiple generations of extended family members.
“These people want to be able to take a vacation and go to their kids’ football and softball games,” Hagedorn said. “In order to do that, they need to be able to leave the farm. It’s really challenging for a small operator to milk cows twice a day for several hours seven days a week and still have time to do those things.”
Despite the trying times, Jim Prusak, an auctioneer with Hager Auction, the Ellsworth company that sold Lieffring’s cows last week, said the pace of farm auctions has decreased over the past several years, although the reason he cited was telling.
“There’s not that many farms left to have auctions,” Prusak said. “The small family farm is kind of going by the wayside.”
Seeking relief
As he visited Wisconsin farms for June Dairy Days this month, U.S. Rep. Ron Kind, D-La Crosse, said he consistently heard how difficult the past few years have been for them.
“Many of them are at a crucial point where they need relief, and they need it quickly,” said Kind, who last week unveiled a plan to preserve the future of Wisconsin dairy.
The plan calls for adding research and development money to create new value-added markets, strengthening programs to encourage the next generation of dairy farmers, ensuring that operating loans remain tax deductible and pursuing a comprehensive immigration reform policy that recognizes the importance of immigrant labor to the state’s dairy industry.
Talks already have begun on a 2018 farm bill in which Kind said he hopes to continue his push to tighten subsidy programs so most of those dollars don’t go to a few large agribusinesses.
“For too long we’ve had a farm policy that has rewarded large agribusinesses, led to more consolidation of farms, driven up land values unnecessarily and made it harder for small and mid-size farmers to compete,” he said.
Kind is a strong proponent of international trade agreements that he believes would open up export markets to Wisconsin farm products under rules U.S. negotiators help set.
O’Connor, however, cautioned that increased reliance on global trade to get rid of excess production can lead to more price volatility.
“If you’re going to hitch your wagon to dumping your product in international markets, then you are setting yourself up for a much bumpier ride,” she said.
Optimism fades
While Holte recognizes the financial squeeze faced by many farmers, he still is confident conditions eventually will turn around.
“These are challenging times. There’s no doubt about it, but I’ve seen many such times throughout my career,” Holte said. “We’ve always found a way to get through it, and I think we still will.”
Lieffring, too, has seen — and survived — lean times before in the dairy market and always kept plugging along. In the past, he just continued milking his cows twice a day and waited for the next upturn in the market.
But this time just feels different, he said, noting that prices have been down for about two years without much prospect of going back up.
His optimism is gone when it comes to the future of small farms in the Dairy State.
“When you drive around the countryside, you see farm after farm all sitting empty,” Lieffring said. “That’s what Wisconsin used to be, but it’s not anymore. I think smaller farms are going to be a thing of the past.”
Source: Leader Telegraph
