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Brancel says dairy processing crisis was “a wake-up call”

Wisconsin’s Ag Secretary says there cannot be unlimited milk production unless there is an unlimited demand and marketplace for milk. “I think what happened should be a wake-up notice to all of us in the dairy industry.”

Ben Brancel tells Brownfield the lesson has been learned, and there needs to be better communications between farmers and processors.  “I think our farmers are going to have to know exactly what their plants are up to.  What products are you making?  Where are they being sold?  What is your forecast for their future marketplace?  Andi, I think that each plant is different.  Each farm is different, but those farmers have got to know, and those plants better be able to tell them what’s going on in the life of processing and market opportunities and sales.”

Brancel does not advocate a national supply management system like Canada’s, but he says processors should be communicating with their producers about how much milk they need.  “If that means the processor sets up a supply management system with the farmers they do business with, and that’s what works, that’s very, very beneficial to all of us.”  Brancel tells Brownfield some processors including Organic Valley and Land O Lakes are already doing that.

The Secretary says his department will work to get dairy groups, producers, and processors talking about supply issues to prevent having more farms without a milk buyer.

Brancel says private and cooperative processors are not being fair to their farmers if they don’t give them forewarning of a problem and says more information needs to be given to them sooner.  He says farmers never used to worry about the co-ops, they just sold their milk and figured the co-op would take care of it, but he says the co-op’s board has to manage what products are made and how the products are marketed, so they should let farmers know when they need more or less milk.

Brancel also says lenders need to be more engaged and know what processors are looking for before advising farmers to borrow and invest in projects.  He says doing so without fully knowing about the markets first can lead to bad financial decisions.

Nearly 75 dairy farms in Wisconsin and Minnesota had 30-days’ notice their milk would not be picked up by Greenwood, Wisconsin-based Grassland Dairy Products when the processor lost ultra-filtered milk sales to Canadian plants.  A few farms sold the cows, and the rest have at least a temporary buyer for their milk.