Grassland Dairy Products Inc. in Greenwood sent letters this week to several dozen state dairy farmers saying the Wisconsin company would no longer purchase their milk as of May 1.
Grassland said a new Canadian classification system for ultra-filtered milk, a product with elevated protein levels used in cheese production, caused them to lose the Canadian market.
Wisconsin Department of Agriculture, Trade and Consumer Protection Secretary Ben Brancel and New York agriculture Commissioner Richard Ball wrote to USDA Acting Deputy Secretary Michael Young on Friday seeking assistance for their states’ dairy farmers. They want the USDA to buy cheese and butter in storage to distribute in its nutritional aid programs, including food banks and the school lunch program.
The USDA has the power to support agriculture producers by purchasing surplus foods under the Agriculture Act of 1935.
“Dairy means more to Wisconsin than citrus to Florida or potatoes to Idaho,” Brancel said in a statement. “Wisconsin dairy’s $43.4 billion economic impact compares to $9 billion of Florida citrus or $6.7 billion of Idaho potatoes.”
Family farms that lost their purchaser would have to sell their cows and go out of business if another company cannot buy their milk, Brancel said.
Wisconsin Farmers Union President Darin Von Ruden said Grassland should have warned farmers sooner, saying they “would be in a much better position today if they had received advance warning from Grassland months ago” to cut production.
Around 75 U.S. dairy farmers lost their purchaser, and over-production of milk in the United States is making it difficult for those farmers to find a new buyer. Grassland placed the blame for dropping the milk producers on Canada’s new regulation. In its letter to farmers, the company expressed “regret that the Canadian governments’ decision has made such a severe impact on Grassland’s and your business.”
Dairy Farmers of Canada said in a blog post that the new classification of ultra-filtered milk is intended to keep Canadian farmers competitive in their own county. The group said the U.S. dairy market is struggling because too much milk is being supplied, but there is not enough demand to level out the cost.
“It is wrong to use Canada as a scapegoat for the situation in the United States,” the post said.
The post also pointed to Canada’s population — less than the state of California — as a reason that U.S. dairy companies should not blame the new regulation, saying, “No matter how one views the situation, exports to a comparatively small Canadian market — one that’s already filled with Canadian milk — are a drop in the bucket that will not solve the problems currently impacting the U.S. dairy industry.”
Von Ruden said something must be done about the oversaturated milk market. In a statement, he said family farmers should encourage processors to adopt proportional policies that would apply to all milk producers to balance the supply rather than dropping entire farms’ contracts.
“We are at a critical turning point in the U.S. dairy industry,” he said. “We can either continue with this increasingly volatile roller-coaster ride … or we can decrease our over-reliance on international markets and harmonize domestic supply with demand.”