April 3, 2017

Dozens of Wisconsin Farmers Lose Their Milk Contracts

 |  By: Anna-Lisa Laca

This story was updated on Tuesday, April 4, 2017 at 11 a.m. CST

Imagine walking to the mailbox on a Monday only to find a note from your processor that in one month they will no longer be picking up your milk. That’s what happened to several Grassland producers in Southern Wisconsin this week.

Grassland handles the majority of cream sold in Wisconsin. The generic, unsigned letter producers received cited issues selling a milk product (Ultra Filtered Milk) to Canada as the reason for their decision to cut ties with some of their producer suppliers.  According to Goedhart Westers, vice president of business development for Grassland, the company was given two days notice that their Canadian buyer would no longer be purchasing the product which is an equivalent of 1 million pound of milk per day. For the approximately 75 producers reportedly being dropped, distance from the milk plant appears to be a factor in determining to kill their contracts. While he won't confirm how many producers lost their contracts yesterday, Westers says one is too many and the company chose producers in areas they thought would have the best luck in finding another home for their milk, not simply based on distance from a plant.

"This is a terrible situation for everyone involved," he says. "We don't want people to think this a decision that came from a desk, because we really do care."

With only 30 days to find a new home for their milk, those who lost their contracts are looking to strike deals with other processors in the area which Mike North, of Commodity Risk Management, says could be a challenge.

“In a normal market where milk is not coming out of our ears, the search [for a new processor] includes many factors including distance from the plant, how milk is paid for and recent history of patronage dividends if you're looking at a coop,” he says. Unfortunately we are not in a normal market.

Oversupply has plagued much of the Upper Midwest and spring flush isn’t here yet.

“It will be very difficult to find anyone in the market to buy milk,” he says.



There is a WI Cheese Industry Conference in Madison, WI next week and I bet some manufacturers looking for new or supplemental suppliers. Please share with your sources.
The roads in Wisconsin are very poor (within the bottom 5 of the nation). I am sure transportation issues had something to do with this.

In reply to by william Mensing (not verified)

Yes, we all are still reaping what Diamond Jim Doyle has sown. So nice of him to raid the transportation fund to the tune of 1.2 billion. The gift that just keeps on giving.

In reply to by Charles Mcintyre (not verified)

Most farmers voted for Trump. You Deplorable's got what you wanted
Grassland has also gotten into the production of milk themselves, buying farms and adding cows with the goal of producing 30% of their needed milk supply. The dairy farmers have been getting the short end of the stick for a long time now and this is just another issue. Grassland also consistently buys distressed milk for way less than they pay their patron farmers. What is really going on with them?

In reply to by Helen Tesch (not verified)

When you say distressed milk are you talking antibiotics, too warm, or what. That really troubles me because here in Canada ANY compromised milk is dumped and farmer is charged a penalty

In reply to by Scott Allen (not verified)

Distressed milk is milk that has been shipped to plants that don't have the capacity at that moment to handle it, ie: plants that shut down for weekends, holidays, physically can't process the volume they receive. Antibiotic or spoiled milk most definitely does NOT moke it intothe food supply.
Keep adding cows guys. What do you expect. Give DFA a call they will be a big help I am sure.
I love how Grassland dumps the contract. Imagine if their shippers did not follow though on the contract? What good is a contract if they can just say, "see ya"? And what kinda of management allows a 1m # a day customer to cut their contract with 0 notice? What a pathetic display of honor.
This is a real shame but shows how our farmers are mere servants to the corporate world. The hard work involved with milk production goes unnoticed by the consumer and corporate world, they carry that, "could care less attitude." What this country needs is for its people to get hungry before a realization of what farmers provide actually comes into their thought process. Many believe everything grows inside their supermarket, rather sad when contemplated.
The people could become the market if only the farmers were allowed to sell directly. Maybe now the Wisconsin legislators will take another look at all the laws against "raw" milk. I would much rather purchase my milk directly from the farmer than have to wait for it to go through so many "middle" men! I say let the farmers start selling their milk directly to the public, at co-ops, farmers' markets, etc.
Grassland is pushing for expanding a 1300 cow dairy they bailed out to a 5000 cow dairy in rock falls Wisconsin saying there is a market for the milk.

Also, it's not just grassland that is sending out these letters. Local radio farm show broadcast said there are other processors dropping patrons as well. They interviewed a couple guys. 1 was a milk hauler who is now going to retire 6 months early as 12 of his stops are on the list to be cut.
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