Survey Shows Little Assistance from Farm Bill Dairy Program

DanDairy & Livestock, Industry News Release

A survey of dairy farmers in Wisconsin shows the 2014 Farm Bill’s Dairy Margin Protection Program has offered little relief to dairy operations. The results of the survey were released Monday by the Wisconsin Farmers Union and included responses from more than 1,000 dairy farmers in the nation’s second highest dairy producing state. A total of 765 respondents said they signed up for the program. Of those, only 93 farms, or 12 percent, had received any payments from the program, and only five indicated they considered the program to be supporting their farm. That’s less than one percent of all farms that signed up. The survey notes additional comments offered on the program tended to involve phrases like: “It’s a scam,” or a: “Total waste of money that could’ve been spent elsewhere.” Many farmers noted how they liked what the Margin Protection Program replaced, the Milk Income Loss Contract program, better, and that it had provided better payouts.

From the National Association of Farm Broadcasting news service.

From: Wisconsin Farmers Union

Wisconsin dairy farmers have been stung this year by prices that are below their cost of production. According to survey results released by Wisconsin Farmers Union, the average estimated cost of production for conventional milk reported by Wisconsin dairy farmers between August and October 2016 was $15.77; the average conventional pay price was $14.81.  Nearly two-thirds (63 percent) of respondents who provided their pay price and cost of production estimates were earning less for their milk than it cost them to produce it. As one farmer wrote, “We have been forced to borrow money to pay for losses and we wonder how we will be able to repair or upgrade equipment or facilities when good milk prices return. By the time we pay for these losses, milk prices will once again drop to loss levels.”

Beyond just low prices, farmers also noted the challenge posed by volatile prices – wild jumps and dips in milk prices that make it difficult to plan for the future. Seventy-one percent of respondents indicated that growing unpredictability in dairy prices made it more difficult to invest in needed equipment and upgrades; 52 percent of respondents stated that growing unpredictability in dairy prices had resulted in health problems from undue stress; and 54 percent of respondents indicated that volatile prices had led them to consider exiting from dairy farming.

One respondent commented that unpredictable milk prices make it “difficult to plan ahead for expense and future needs. And because of this farmers keep trying to produce as much milk as possible when prices are low to make ends meet, or when prices are up to get ahead or catch up on the bills before prices go down again.”

Wisconsin Farmers Union conducted its Wisconsin Dairy Farm Survey from August to October 2016.  Surveys were sent to all dairy-producing farms in Wisconsin to better understand how current milk prices are affecting those farms. The survey is the first of its kind to ask farmers directly about potential solutions for improving milk prices. Farmers responded, with 1,050 surveys returned from across the state.

Dairy survey respondents indicated that they are eager for solutions that will manage over-supply and moderate the increasingly wild swings in dairy prices.  Seventy-one percent supported overproduction management being incorporated in any price support program by Congress, and 72 percent supported managing oversupply at the state level.

Despite that favorable feedback, additional comments from respondents conveyed a strong desire to see supply management measures implemented by cooperatives and industry groups, rather than by the government. As one respondent noted, “Management should be producer-driven through their co-ops instead of expecting the government to provide a program.”

The survey also asked about participation in the Margin Protection Program (MPP).  Seventy-three percent of respondents indicated they signed up for the program, but of those only 12 percent had received any payments to date. Only five farms – less than 1 percent of those who reported signing up – considered the MPP to be supporting their farm during the low price period.

Most comments on the MPP ranged from “it’s a joke” and “total waste of time and money,” to frustrations that the program doesn’t appropriately account for the cost of inputs other than feed for Wisconsin dairy farmers.

As one farmer put it, “We feel this program is worthless, because after you sign up they change the feed calculators and it doesn’t take into consideration farms that grow their own feed and rent land.”

A full summary of the survey results will be available on WFU’s website, www.wisconsinfarmersunion.com, next Monday, December 5. Wisconsin Farmers Union will also host a telephone press conference for members of the media at 10:30am that day to answer questions about the survey.

WFU President and Vernon County Dairy farmer Darin Von Ruden commended dairy farmers for taking the time to respond to the survey. “It’s great to see dairy farmers across the state going out of their way to share their thoughts and experiences on these serious issues facing our dairy industry. The responses are very important to our organization, and we hope this survey will help the industry move forward.”