Farmers reaching retirement age and the economic struggles of the year contributed to a portion of Wisconsin dairy farms exiting the industry in 2023.
As of Jan. 1, there were 5,661 licensed dairy herds in Wisconsin, according to the United States Department of Agriculture National Agricultural Statistics Service.
Wisconsin lost 455 dairy farms in 2023 — a drop of 7.5% from one year prior when herd numbers were at 6,116. The decline is similar to recent years when 2022 saw a loss in dairy farms of 6.4% and 2021 experienced of a drop of about 6%.
“Farmers are aging out and retiring,” said Chad Vincent, CEO of Dairy Farmers of Wisconsin. “In 2020, 64% of the lead dairy farmers in the family were over the age of 50 while 16% were over 65. That was over four years ago, so now, the vast majority are almost 55 while a big chunk is closing in on 70 years old.”
A 2020 study of Wisconsin dairy farmers conducted by DFW and the Department of Agriculture, Trade and Consumer Protection revealed that 17% of farmers were not going to be milking cows in five years. For farms with 200 cows or fewer, the number was 22%. Only 40% of survey respondents had identified a successor to keep the farm a milking operation.
“If the numbers hold true, we can expect to be down to around 3,500 farms when these people retire,” Vincent said.
A concentration of dairy farms and cows can be found in pockets across the state.
As of Jan. 1, the top 10 dairy counties by farm numbers are Clark 638, Marathon 356, Grant 243, Dane 173, Lafayette 173, Shawano 168, Monroe 166, Chippewa 161, Manitowoc 148 and Dodge 147. Fond du Lac and Taylor counties follow with 146 dairy farms each.
The counties that lost the most farms from 2023 to 2024 were Clark with 28, Marathon 26, Grant 25, Monroe 24 and Vernon 24.
Vincent said economics and the milk price also played a part in the timing of a producer’s choice to exit. The increasing value of cows for beef might have moved up some people’s timeline for selling as well.
“Last year was a really difficult financial year, and a lot of government subsidies were coming to an end,” Vincent said. “We never want to see a farmer leave that wants to stay in.”
Dairy farmer and processor, Ken Heiman, said the reason farmers are exiting the industry undoubtedly has to do with money.
“We have a lot of farmers who are baby boomers, and they’re looking to get out,” Heiman said. “With prices so subdued right now, how does anybody go in and buy a small farm out?”
Heiman and his wife, Joellen, milk 500 cows near Marshfield and also own Nasonville Dairy and Weber’s Farm Store.
“I’m 70-plus years old and have seen a lot of guys I went to school with who farmed with me all this time, who are retired one way or the other now,” Heiman said.
Heiman said that sometimes farmers seek other opportunities to make a living on the same land.
“Right now, the price of corn is spectacular, and soybeans are great too,” he said. “A lot of people are also buying wheat and alfalfa. Farmers are seeing they don’t have to milk cows to actually make a living.”
Although Wisconsin has lost nearly half of its dairy farms in the last 10 years, cow numbers remain steady. As of November 2023, Wisconsin was home to 1,270,000 dairy cows. The average number of cows per dairy farm is 221.
Vincent said those numbers are positive for Wisconsin.
“We have an amazing number and diversity of farms,” Vincent said. “There are farms with 50 cows to farms with thousands of cows. It’s not like that in most places.”
Vincent said the average number of cows per farm in California is 1,500 and in Texas, it is 2,000.
In 1983, the average cow number per farm in Wisconsin was 42, a growth of 81% to today. Since 2015, when the average herd size was 128 cows, herds have grown by 42%.
The largest concentrations of farms and cows tend to be found on land that supports good crops and a strong milkshed, Heiman said.
Although dairy herds are disappearing from the landscape, milk production in the state continues to climb. Total monthly milk production for November 2023 was at 2.58 billion pounds. Better management, feeding and technology contribute to this number growing by a significant percentage every year, Vincent said.
The state is strong in processing and manufacturing capabilities with 275 processors.
“We are so blessed with the infrastructure that we have here, from the farms to the processors to the haulers to state government and all the facilities and abilities the state brings, including the Center for Dairy Research,” Vincent said. “No one on the planet has the infrastructure for dairy like Wisconsin does.”
Outside general economics of the world, Vincent said the hardest obstacle processors face today is labor.
“Many processors could be selling more, producing more and packaging more, but they don’t have enough labor for second and third shifts to keep plants running at the levels they wish they could,” Vincent said.
On the flip side of these missed opportunities, plant expansions are occurring and new plants are opening. In addition, Vincent said, across the board, government funding is becoming available to the processing industry to support increased equipment and hauling.
As farmers look to keep more of their money on the farm, on-farm processing is becoming more popular.
“There’s not a week that goes by that I’m not talking to farmers about a farmstead operation,” Vincent said. “There is so much interest in it.”
Heiman sees opportunities for young people looking to enter the industry but said they should do their research before getting started.
“The first thing is to make sure you know what it costs you to produce milk,” Heiman said. “Never be afraid of the (Dairy Revenue Protection) program. When you have your milk price established that you can afford, and you can get a DRP program that helps ensure this, you’re guaranteeing that you’re not going to lose money.”
Heiman expects the number of dairy farms to drop off at a similar rate as 2023 in the first half of 2024 but then slow in the second half.
“I’m a firm believer there’s going to be a higher price for milk in the second half of 2024,” Heiman said. “This might sustain people who were thinking they could get out but don’t have to right now because the price is good.”
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