Going for Broke in America’s Dairyland?

With Milk Prices Low, Wisconsin Farms See Rise in Bankruptcies

March 2019


As milk prices have fallen, Chapter 12 federal bankruptcy filings by Wisconsin farms have doubled over the last five years, providing added confirmation of the widely reported troubles facing dairy operations. Preserving the state’s heritage as “America’s Dairyland” is important not just to rural Wisconsin, but to urban communities as well.

Wisconsin’s dairy industry accounts for nearly half of the state’s critical agricultural sector and generates $43.4 billion a year in economic activity—or more than $82,500 per minute, according to the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP).

Dairy is the backbone of Wisconsin agriculture and a key element of the state economy, producing the raw material that feeds much of Wisconsin’s food processing infrastructure. Directly and indirectly, agribusiness, including dairy, supports 413,500 jobs or 11.9% of the state’s employment, including both urban and rural jobs in manufacturing, construction, and services. It also provides tax revenues for public services such as education and transportation, especially in rural areas anchored by dairy farming.

In addition, the industry’s impact goes beyond economics. Dairy farms are a core part of Wisconsin’s identity and heritage.

Today, however, this legacy faces serious challenges. For many years the number of small farms has been decreasing due to a range of factors including low milk prices. Ironically, these conditions can also lead to increased production. Lower prices mean less profit; to raise their incomes, many dairy farmers have purchased more cows to produce more milk and increase sales. In recent years a combination of increased supply and sluggish demand has created a vicious cycle where small farmers who cannot keep up are squeezed out of the market. continue reading…