Wisconsin dairies feels squeeze

CAZENOVIA, Wisconsin, December 24, 2004, Chicago Tribune via CropChoice: Bernard Deitelhoff considers himself a dairy farmer, but his day begins long before his Holsteins amble into his barn to get milked.

To maintain a farm that has been in his family for five generations, Deitelhoff, 45, works a second job, driving the back roads of central Wisconsin at dusk, and again in the middle of the night, to deliver bulk mail to rural post offices six days a week.

He usually sleeps in the back of his Chevy van, in the parking lot of a Mobil station near the post office in Portage, so he doesn't have to drive an hour to work in the morning. It means a little extra sleep: When he sleeps in the van, Deitelhoff's alarm doesn't go off until 3:30 a.m. He spends the next 3 1/2 hours hauling mail on dark, hilly roads while he sips Diet Coke, which "tastes just like coffee when it's warm."

In seven years he has flipped his mail truck on an icy road and hit seven deer, several turkeys and an owl.

"That owl was sitting in the road and jumped right up and took off the antenna," he said. "The radio hasn't worked the same since."

Many farmers like Deitelhoff are feeling squeezed by periodic price slumps, foreign competition and more efficient mega-farms, and are taking second jobs. Deitelhoff views his mail route as "a means to support my hobby."

He is trying to avoid becoming part of another trend: Wisconsin has lost nearly four dairy farms a day in recent years. Almost a third of Wisconsin's dairy farmers shut down from 1997 through 2002, with the number dropping from 24,065 to 16,866.

The Deitelhoff farm also is part of another endangered group: midsize farms.

According to the most recent Census of Agriculture, published every five years by the U.S. Department of Agriculture and released last summer, the number of tiny farms and very large farms is growing. But midsize farms are on the wane.

In traditional dairy states such as Wisconsin, Pennsylvania and New York, the farms remain relatively small compared to those out West. As a result, the nexus of America's dairy industry is shifting to such places as New Mexico and Idaho with cheap land and fewer people to complain about the smells wafting from a 5,000-cow dairy farm.

Wisconsin still leads the nation in the number of dairy farms, though California is No. 1 in milk production. Wisconsin is clinging to the title of the nation's top cheesemaker, with California closing in fast. Wisconsin residents so identify with the dairy industry that they refer to themselves as "cheeseheads" and voted overwhelmingly that the quarter honoring the state include a dairy cow and a hunk of cheese.

While the number of farms plummeted in Wisconsin, the total number of milk cows declined by only 9 percent, indicating that dairy farms are getting bigger. But Wisconsin still lags far behind emerging dairy states in the West. In 2002, for instance, Wisconsin's dairy farms averaged 74 cows; that same year, New Mexico dairy farms had an average of 836 cows.

To combat the trend, state officials created a program to encourage dairy farmers to expand or to find a niche such as organic, and the state is emphasizing the quality of Wisconsin's dairy products over its Western rivals. But some argue that the state isn't doing nearly enough.

"Wisconsin and Minnesota basically have these invisible signs saying `No Large Dairies Need Apply,'" said Mary Ledman, a dairy industry analyst who grew up on a 50-cow dairy farm in Wisconsin. Noting that other states such as South Dakota and Iowa are welcoming large-scale dairies, she said, "You don't see that kind of welcome wagon in the Upper Midwest, and as a result, we are exporting our dairy industry elsewhere."

Ledman said opponents of large-scale dairies are ignoring the reality of the business. Traditional small dairy farms like the one she grew up on are so inefficient and antiquated that they can't compete; as a result, she said, most children of dairy farmers have found work elsewhere.

"Minnesota and Wisconsin need to decide whether they want a dairy industry," she added. "And if they do, they have to realize that it's not going to look like their daddy's dairy industry."

Call to focus on quality

But Tony Ends, a vegetable farmer in southern Wisconsin, said the state should focus on distinguishing the quality of its dairy products because it doesn't have the space, weather or resources to compete with Western states to produce the cheapest milk. The big dairies, he said, simply create a glut of milk that is driving down the price.

"The price of milk is what is driving farmers out of business," said Ends, who along with his neighbors is fighting to close a mega-dairy in his neighborhood because of health, environmental and animal-welfare concerns. "Wisconsin will never outproduce California. What Wisconsin needs to do is distinguish itself with specialty cheese and quality."

Just north of the Illinois border, in the tiny town of Brodhead, Dan and Mary Monson represent the new face of Wisconsin dairy farms. They operate a dairy that is as much factory as farm, a meticulous, high-tech operation with 1,500 cows and 20 full-time employees. Those with experience at milking start at $2,000 a month for a 54-hour work week.

Both the Monsons grew up on small, traditional dairy farms in Wisconsin, but after spending five years working in California's expansive dairy area, they returned to Wisconsin and sought to replicate what they learned.

"I realized I didn't want to do what my parents did because I wanted a life," said Dan Monson, 42, explaining that small dairy farms often are broke and the operators are chained to their cows seven days a week. "I couldn't go back to Wisconsin and milk 40 cows."

So with the financial backing of a successful California dairy farm family, the Monsons opened the $5.5 million Spring Grove Dairy in 1999, then the largest in the state. The 80-acre farm now operates around the clock, and the cows are milked three times a day, filling two semitrailer tankers full of milk.

The cows at Spring Grove Dairy spend their days in long metal barns on concrete floors with fresh sawdust and shredded tires as bedding. A computer keeps close tabs on how much milk each cow is producing via a computer chip around each animal's neck.

The manure is regularly flushed out of the barns into clay-lined lagoons behind the barns, and the liquid manure is later injected into the soil of surrounding farmland as fertilizer.

While Monson said his "ag neighbors" have been supportive, he acknowledged that some others have griped about the smell. But he points out that his family, which includes four children, lives on the property, and he argues that his farm has done more good than harm to the community.

With Monson's ready and abundant supply of milk, a shuttered cheese plant in nearby Juda reopened, creating 80 to 100 new jobs.

"I feel really good about that," Monson said.

Monson acknowledged he misses the slower pace of a smaller dairy, though with his full-time staff, he regularly gets to take days off. He and his family spent this week in Florida on vacation.

Monson and his wife still love the idea of a traditional dairy farm, but the economics today simply don't make that possible "without putting your entire life at risk."

Monson said he and his wife, both of whom work full-time on the dairy, earn in the low six figures combined with their salaries and profit-sharing.

An old-time operation

Two hours north of Spring Grove Dairy, Deitelhoff's 124-acre farm looks so different that it's hard to believe it produces the same commodity. The hillside behind the barn is strewn with farm equipment in various states of repair, and the milking parlor is in a battered barn.

The irony of Deitelhoff's second job as a mail carrier is that he's too busy to milk his cows. That chore is left to his wife, Cyndi, and their six children, who range in age from 6 to 14 and straggle to the barn at 5 a.m. to get started. The oldest children milk the cows while Cyndi supervises the youngest, who lug pails of milk to feed the calves.

After Deitelhoff arrives home from his mail route about 7 a.m., he eats breakfast, then spends the day doing odd jobs on the farm, puffing on little cigars while he cuts hay or fiddles with equipment. By the time he jumps back in his mail truck for his evening route, about 5 p.m., Cyndi and the kids return to the barn to milk the cows a second time.

"I've been milking for a year, and I'm already sick of it," said 10-year-old Olivia. The oldest, Matthew, said the other students at their school "think we're insane" for getting up so early.

But for the occasional grumbling, the Deitelhoff children sang songs, danced and cavorted around the barn while milking cows one November evening. The two youngest, Sylvia and Sylvester, climbed over the backs of cows with such names as Alexandria, Ohio and Spot.

"I call them my six pack," said Cyndi, referring to her children. "They do good, but they can give you a headache."

At a time when so many dairy farmers have gone under, Deitelhoff said he has survived by taking a second job, reducing his herd from 60 to 40 cows, growing most of his own feed and taking care of sick cows himself rather than paying for a veterinarian. His family, which had no health insurance for three years, is now covered by a free state insurance plan.

"We're actually considered the working poor," he said. "That's why people have left the dairy industry."

Deitelhoff said he and Cyndi, a part-time bartender and cook at a local restaurant, earn $40,000 annually from their off-farm employment and net about $12,000 in a good year from the milk produced by their cows.

"We've talked about selling out, but I don't want to leave the land. It's pretty here," Deitelhoff said. "I'm just stubborn, I guess. I keep thinking it will turn around and get better. I don't think it will."

Deitelhoff isn't the only midsize farmer who feels squeezed.

Too small to compete against industrial-size farms that supply global markets or too big to sell to niche markets such as farmer's markets or roadside stands, many midsize farms are being forced out.

Midsize farms fading

America's dairyland no exception to national farm loss

Between 1997 and 2002, only the smallest farms (those with sales of less than $1,000 a year) and the largest farms (those with sales of $500,000 or more) grew in number. The consolidation is especially felt by Wisconsin dairy farmers, who expect to see a huge reduction in smaller farms over the next four years.

NUMBER OF WISCONSIN DAIRY HERDS BY SIZE

Herd size 2004 2009* % change
1-29 cows
2,200
1,150
-48%
30-49
3,900
2,300
-41%
50-99
6,500
4,700
-28%
100-199
1,900
1,930
+2%
200-499
700
890
+27%
500+
200
330
+65%
Total
15,400
11,300
-27%

CHANGE IN NUMBER OF U.S. FARMS, 1997-2002

Farm size* 1997 2002 % change
Less than $1,000
415,952
570,919
+27%
$1,000 - 2,499
277,074
255,639
-8%
$2,500 - 4,999
265,667
213,326
-25%
$5,000 - $9,999
267,575
223,168
-20%
$10,000 - 19,999
228,297
197,967
-15%
$20,000 - 24,999
65,342
58,190
-12%
$25,000 - 39,999
123,854
109,310
-13%
$40,000 - 49,999
55,775
48,596
-15%
$50,000 - 99,999
163,510
140,479
-16%
$100,000 - 249,999
190,919
159,052
-20%
$250,000 - 499,999
91,503
81,694
-12%
$500,000 +
70,408
70,642
0%

Sources: USDA, Wisconsin Agricultural Statistics Service

In the five years covered by the latest agriculture census, the number of the smallest farms, with sales of less than $1,000 annually, grew by 27 percent, from 415,952 in 1997 to 570,919 in 2002. The number of the largest farms, with annual sales of more than $500,000, inched up by less than 1 percent, from 70,408 to 70,642.

The remainder of America's farms, 70 percent of the total, declined by 14 percent.

Overall, the Agriculture Department's five-year census provides a much bleaker picture of what is happening on American farms than a November USDA report that trumpeted record farm incomes for the second year in a row. But even an author of a farm income report said recent high prices for everything from soybeans to milk will give farmers only a temporary "breather" from the pressures of consolidation.

"It's not going to change the outcome in the long run," said Roger Strickland, a USDA analyst, adding that the high prices eventually will come down. "It might slow it down a little. The thing that is driving consolidation is cost efficiency. The smaller guys are dropping out because they can't compete."

Some argue that what is happening in agriculture is little different from what is happening elsewhere in the U.S. economy, with midsize groceries and hardware stores being replaced by mega-stores such as Wal-Mart and Home Depot.

"The general picture is just that the economies of scale keep increasing," said Bruce Gardner, an agricultural economist at the University of Maryland. "The size of a farm that makes the most sense is larger than it used to be."

Technological advances and changes to the structure of farms have driven the changes, Gardner said. As an example, he cited the advent of "contract" farming in which farmers raise pigs on contract for a meatpacking company rather than owning the animals themselves. The result has been larger hog farms and fewer hog farmers, a 37 percent drop from 1997 to 2002, according to the census.

But others contend that consolidation all along the food chain, from seed companies to meatpackers, has hurt the ability of midsize farmers to compete. In the pork business, for instance, it's easier and cheaper for a meatpacker to contract all its hogs from one huge farm rather than buy them from 10 smaller farms.

The critics also argue that U.S. farm subsidies favor industrial agriculture at the expense of smaller farms.

"The fix was in to concentrate agriculture," said Tom Lyson, a professor of development sociology at Cornell University, who said the loss of midsize farms devastates rural communities. "It's the Wal-Marting of agriculture."


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