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.