A farmer-turned-lawmaker says diversification is the key.
When milk prices were high, farmers were able to put away some money and even pay down a little debt. So says State Senator Kathleen Vinehout (D-Alma). But now it's time to adjust to decreasing milk prices, but how low can farmers afford?
"Think about the cost of production. I mean, I'm talking to farmers where the cost of production is at $15.00 and we're down to nine. So we're losing – we're hemorrhaging right now. We can't go very much lower and we can't stay low for very long."
The Eau Claire-area Democrat says agriculture and dairy farmers need to diversify to help insulate against the market fluctuations.
"What we have to do is figure out how to help those creameries diversify so they're not just relying on the commodity market …The extent that the farmers can diversify either with renewable energy in sort of an alternative crop or by moving toward the organic dairying. All this really helps insulate yourself."
Vinehout remembers suffering through the 25-year low prices when she was milking cows – and losing money – back around 2001-2002. The federal Milk Income Loss Contract (MILC) program helps to keep some farmers afloat, but it's not enough.
"Unfortunately the milk-pricing system is a mess – it's been a mess for a long time, and it's not something that I, as a state legislator, can influence."
But, Vinehout says, she'll work hard to wean Wisconsin's Ag industry off its dependence of commodity prices.
Analysts expect milk prices to slowly start increasing – barely enough to cover the cost of production – later this year.
