Did you know that the impact the dairy business in Wisconsin
has on our state's economy is more than twice that of the citrus
industry's impact
on Florida's economy and nearly nine times the economic impact
as Idaho's potato industry?
So were many others who were involved in Wisconsin's dairy
business when we began to examine in detail dairy's effect within
our state. Five years ago, we confirmed through focus group research
that few
Wisconsinites realized how large an impact Wisconsin's dairy
industry has on our state's economy, its heritage and natural
beauty, and its reputation around the globe. As a result, the
Wisconsin Milk Marketing Board (WMMB) developed the Dairy Impact
Initiative, a communications program designed to update some
of the perceptions held by our state's residents.
Although the dairy industry's vital role in our state's formation
is an often-told story, its $20.6 billion annual contribution
to Wisconsin's economy is not a well-known fact. No other single
product produced in this state creates a greater
economic impact than milk.
What are some of the perceptions about dairy in Wisconsin?
Our focus group research conducted among consumers and business
people pointed out a number of misperceptions that didn't reflect
Wisconsin's modern dairy business. For instance, there's a perception
that many modern farms are owned by out-of-state corporations.
The reality is, today, more than 99 percent of our state's dairy
farms are family owned and operated. Although the business structure
may have changed to include more family members and other partnering
relationships, today's family-run dairy operations are making
significant contributions to our local communities in the form
of jobs, tax revenues and stable businesses.
Another perception that needed to be addressed was the notion
that dairy farms are just a vanishing part of the rural landscape
and that they don't help build the local economy like Main Street
businesses do. In rural communities across Wisconsin, just the
opposite is the case. Unlike many industries, the jobs created
by dairy businesses bring long-term stability to local employment
bases. And most of the revenue generated by dairy farms stays within
the local economy.
Based on financial benchmark information from UW-Madison's Center
for Dairy Profitability, a 250-cow Wisconsin dairy farm will spend,
on average, about $675,000 annually in supplies, products and services
that are purchased from local businesses and retailers. That figure
also includes such expenditures as land rent, payments to local
banks and lending institutions, utility expenses and taxes.
Another misperception was that dairying is a low-tech industry
with few career options for young people. Again, nothing could
be further from the truth. Today's modern dairy infrastructure,
which includes our farms, our manufacturing plants, and our product
marketers, is considered one of the most advanced in the world,
supporting more than 300 different career opportunities in areas
such as production and animal sciences, biotechnology, equipment
engineering and manufacturing, marketing and business/financial
services. In our state, people working in agriculture make up 12
percent of Wisconsin's total workforce. And, for every new job
created in agriculture, an additional 1.3 jobs are added to our
state's employment base.
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What impact does dairy farming have on the average Wisconsinite?
Wisconsin's dairy industry generates $20.6 billion a year for
the state's economy and accounts for more than 40 percent of the
420,000 jobs in the agricultural sector.
Dairying's multi-billion dollar economic impact is broadly dispersed
throughout the state. Besides the direct economic contribution
of farms and dairy-related companies, the dairy industry also uses
machinery, trucks, fuel, financial services and other goods and
services from local companies, generating additional "non-dairy" jobs
and income in the state. So while residents may not realize it,
the dairy industry impacts all sectors of Wisconsin's economy.
The state's dairy infrastructure also plays a critical role in
the health of Wisconsin's economy. Because of Wisconsin's extensive
farm base, combined with agriculture's industrial and service contribution,
the overall impact of farming on Wisconsin's economy is huge.
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What makes Wisconsin "America's Dairyland?"
Dairying in Wisconsin is not just another industry among many,
but the industry that's made Wisconsin famous. It is
the one industry that defines us in the eyes of our fellow Americans
and in the minds of people from around the world. Wisconsin has
been an international leader in dairy and cheese technology for
more than 150 years. Here are some of the reasons our state is
poised to lead the world in dairying for decades to come:
Wisconsin is home to more dairy farms than any other state—14,000+ dairy operations (about 20 percent of the nation’s total) caring for over 1.2 million dairy cows.
The Badger State ranks first in the number of organic and grass-based dairy farms.
Our state leads the nation in the number of on-farm bio-energy technology installations which converts animal waste to "green energy.”
Wisconsin leads the country in the number of cheese plants (136),
and Wisconsin is No. 1 in overall cheese production. The state's
cheesemakers produce more than 2.4 billion pounds of cheese annually,
26% of the nation's total.
Cheesemakers in America's Dairyland produce more specialty cheeses—such
as Asiago, Edam, Gorgonzola and Havarti—than any other state.
This is a positive trend for Wisconsin because the market for specialty
cheese is growing significantly.
In 1993, Wisconsin produced 83 million pounds of specialty cheese. By 2005, that number had more than quadrupled to 355 million pounds, a 328% increase.
The state is home to more than 1,200 licensed cheesemakers and is the only state
with a Master Cheesemaker® Program, a sign that cheesemakers are
committed to reinvesting in expertise.
Some of the world's leading dairy-related companies—employing
thousands of residents—are headquartered here in the Badger
State, including Foremost Farms USA, ABS Global, Westfalia Surge
Technologies,
Alta Genetics, Chris
Hansen, Inc. and Holland Manufacturing, to name just a few.
Thanks to the University of Wisconsin System, our state is also
home to some of the country's top dairy scientists, researchers
and technology experts.
Being "America's Dairyland" is more than mere numbers,
however. The dairy business is central to our past, an important
component in today's state economy and vital part of our future.
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How long has dairy farming been important to Wisconsin?
Dairy farming and cheesemaking date back more than 160 years,
before Wisconsin was even granted statehood in 1848. In fact,
Wisconsin's first cheesemakers were farm wives who, in the 1830s,
began making cheese in their kitchens as a way of storing excess
milk. Wisconsin's first cheese "factory" was started
by Anne Picket by gathering milk from her south-central Wisconsin
neighbors and producing cheese for all to share. By 1900, Wisconsin
had become a powerful player in cheese production nationally and,
by 1920, was the nation's top producer. Today, about 90% of
Wisconsin cheese is sold outside the state's borders.
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What are some of the economic pressures Wisconsin dairy producers are facing?
Volatile and often low milk prices are working in conjunction with high
input costs (equipment, feed, fuel, utilities, property taxes,
insurance, etc.) to make profit margins tight for dairy producers.
As a result, some producers are increasing herd numbers, striving
to raise milk production per cow and even exploring additional
business options for their dairy farms, such as on-farm cheese
and dairy product production. By taking advantage
of new technologies, new management strategies and business structures,
many Wisconsin dairy producers are able to weather volatile milk
prices, testament to the fact that they are among the most efficient
and innovative businesses in the country.
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Why does there seem to be controversy over dairy farm expansions?
Expansion is often discussed as a recent phenomenon in the dairy industry,
but Wisconsin dairy herds have been steadily growing larger since
pioneering times. In fact, the typical Wisconsin dairy herd is
nearly six times larger than it was 56 years ago, from 15 cows
in 1950 to 85 cows today. During the 1990s, growth in the average
Wisconsin herd size increased 3% per year. (Yet when compared to
other states, Wisconsin's dairy farms tend to be much smaller.
California farms average about 900 cows. Even some Vermont farms
have larger dairy herds than Wisconsin.)
In addition, research from the University of Wisconsin's Program on Agricultural
Technology Studies shows that most large Wisconsin dairy farms reached their
current size through a continued series of incremental expansions. Surveys
of Wisconsin dairy producers indicate that most expect to either maintain
their current herd size or expand by a moderate number of cows over the
next five years. So while the trend in Wisconsin is toward larger dairy
herds, the changes will likely come through modest, incremental growth.
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Do small dairy farms have a future in Wisconsin?
There is a place in Wisconsin's dairy industry for all sizes of farms.
In fact, the diversity that exists across our state's dairy farm
operations is a strength that no other state can claim. From the
smaller 50- to 100-cow grazing herds to large modern operations with 500 to 1,000 cow
herds, our dairy producers are using many different business models
to revamp our family farms, mechanize and diversify, and help breath new life into the
state's most cherished industry.
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Are most Wisconsin dairy farms now owned by corporations?
Contrary to popular belief, the vast majority of dairy farms in Wisconsin are still family owned and operated. However the business structures that define the operation may look quite different than the single proprietor farm of two decades ago. It may mean that two or more families are combining resources under a new business structure to provide for a new generation of multi-family dairies. Or it may mean that parents and their children are establishing a working plan for an orderly succession that positions the business for long-term success. These are just two of the many examples of Wisconsin farmers applying solid business principles to their operations to preserve the viability and profitability of their farms for generations to come.
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Why is the number of Wisconsin dairy farms decreasing?
It's not just happening in Wisconsin, and it's not just happening in the
dairy industry. U.S. farm numbers have been decreasing for the
past century. In the early 1900s, farms in the United States numbered
more than 6 million.
Today, there are just over 2 million. In 1950—the first year Wisconsin
kept dairy farm numbers—Wisconsin had 143,000 dairy farms out of 3.6
million nationwide, about 4 percent of the total. Today, there
are roughly 65,000 U.S. dairy farms, and 14,000+ of them are in
Wisconsin. That's roughly
20 percent of the nation's total.
The increasing use of modern machinery, technology, better management practices, feeding programs and improved breeding have all combined to dramatically increase on-farm productivity, which ultimately results in fewer, but more productive farms. Another factor is at play as well. There remains an entire generation of men and women still working on farms in Wisconsin today who remember what it was like to milk cows by hand. Many farmed with horses and remember life on the farm without electricity. As these farmers retire, their farm acreage is often incorporated into larger, multi-family operations that continue to use the land to grow the crops and feed for our dairy herd.
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