April 6, 2017

Wanted: A Home for 4 Tankers of Milk

 |  By: Mike Opperman

Anywhere from 90 to 100 dairy producers in Wisconsin and New York are looking for new markets for their milk, and fast. Impacted processors, including Grassland Dairy and Nasonville Dairy in Wisconsin, have lost Canadian customers thanks to changing import regulations on what our northern neighbors designate as Class VII, or ultrafiltered, milk.

Problem is, there’s nowhere to go. Cows keep milking, regardless of herd size, and the issue is dire for everyone impacted.

“We got a phone call on Monday letting us know that a letter was in the mail telling us that they were no longer going to take our milk,” says Bruce Walker, who milks 3,200 cows on two dairies near Fox Lake, Wis. “It took about a minute and 48 seconds to end a four-year relationship.”

After Walker hung up the phone and gained his composure, he immediately started trying to find a new market for his four-tankers-a-day supply. “We started calling companies and they said that we would be put on a list,” he says. “But it became apparent pretty quickly that there wasn’t anywhere to go.” Walker has until May 1 to find a new home for his dairy’s milk which, in a twisted sense of irony, is the four-year anniversary of the first day he shipped milk to this supplier, Grassland Dairy. He has started contacting out-of-state processors to find any market opportunity.

An interesting aspect of Walker’s relationship is the forward contracts he has with Grassland. “Last summer we wanted to balance our milk price so we contracted three loads per day through all of 2017,” Walker says. The status of those contracts is up in the air.

Given the market dynamics, Grassland or any other processor affected by the Canadian market dynamics aren’t to blame, and certainly Grassland is doing everything they can to help out the affected patrons. They were given two days notice they would no longer be able to sell a product that accounts for 1 million pounds of milk per day, says Goedhart Westers, vice president of business development. Westers says they have been working hard to find homes for affected patrons, including reaching out to other processing plants to find room.

As is typical in a state like Wisconsin that relies heavily on its dairy producers, support mechanisms have been established. The Wisconsin Department of Agriculture, Trade and Consumer Protection has established a hotline for producers affected by the situation. Walker called and has his name on the list. In some cases, especially for smaller herds, neighbors are lining up to house animals if needed. Walker says that will be difficult in his area, since most of his producer neighbors already ship milk to Grassland and were affected as well.

Industry groups and legislators are doing their part, expressing their dismay over ongoing trade practices and called on federal and state governments to take action. Wisconsin Republican Senator Ron Johnson expressed his concern for the state’s farmers and the need for action to be taken. “Our state’s dairy farmers are some of the best in the world, and they should not be the victims of a trade dispute they didn’t start,” the Senator says. “I urge the administration to work with the Canadian government and swiftly find a way to resolve this matter before hardworking Wisconsin farm families are hurt.”

In the meantime, some producers have seen this as an opportunity to exit the business. For Walker, the future is uncertain. “This is just a big mess,” he says.