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?

SURPRISED?

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. Several years ago, we confirmed through focus group research that few Wisconsinites realize 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.

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.

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— nearly 14,000 dairy operations (about 20 percent of the nation’s total) caring for over 1.25 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.

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.

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.

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.

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.

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.

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 nearly 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.