Wisconsin Dairy Farmers Going Bankrupt in Record Numbers, Blame Trump Tariffs

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A perfect storm hit Wisconsin dairy farms: Overproduction, Bad Decisions, Trump's Tariffs

A trio of major errors hit Wisconsin dairy farmers, but the last one, Trump's tariffs, was the final straw threw many Wisconsin farmers into bankruptcy.

Please consider Stung by Trump’s Trade Wars, Wisconsin’s Milk Farmers Face Extinction.

For decades, Denise and Tom Murray rose before 5 a.m. and shuffled through mud and snow to milk cows on the farm that has been in their family since 1939. This month, after years of falling milk prices and mounting debt, the Murrays sold their last milk cow, taking pictures while holding back tears as the final one was loaded onto a truck and taken away.

“It’s awful hard to see them go out the last time,” said Ms. Murray, 53. “It’s scary because you don’t know what your next paycheck is going to be.”

Over the past two years, nearly 1,200 of the state’s dairy farms have stopped milking cows and so far this year, another 212 have disappeared, with many shifting production to beef or vegetables. The total number of herds in Wisconsin is now below 8,000 — about half as many as 15 years ago. In 2018, 49 Wisconsin farms filed for bankruptcy — the highest of any state in the country, according to the American Farm Bureau Federation.

Short-Term Pain Nonsense

Trump pleads that it's short-term pain for long-term gain. But it's tough to see any long-term gain when the intermediate term is bankruptcy.

The Murray's received all of $400 from Trump's farm aid package. “In every aspect, it’s not worth it — it’s not worth the fight,” said Mr. Murray.

Price of Milk

The price of milk is about where it was in mid-2010. The price has gone essentially nowhere since late-2014.

The price of new equipment and services and have gone up.

Final Straw

Trump's the trade wars were the final straw.

  • The new North American trade deal, which is supposed to give dairy farmers more access to Canada’s tightly controlled market, has yet to be ratified by Congress and may never be approved given Democratic opposition.
  • Mr. Trump has yet to remove his metal tariffs on trading partners like Europe, Canada and Mexico, which refuse to lift their retaliatory tariffs [on agricultural goods] until those levies come off.

Overproduction

In 2012, Mr. Walker put into place a program to encourage dairy farmers to step up production with the goal of producing 30 billion pounds of milk a year by 2020. That was easily accomplished by 2016, but the oversupply crippled the industry.

“He wanted to put Wisconsin back into the lead in milk production over California,” said Joel Greeno, a dairy farmer and the president of the Wisconsin advocacy group Family Farm Defenders. “It was more an example of arrogance than practicality.”

Supply Management

Many farmers favor the idea of a supply management program for dairy like the one Canada uses, but the Trump administration has not supported such a program.

Stop the Meddling!

  1. Trump's tariffs and the counter-tariffs have killed farmers. End the tariffs.
  2. Stop production goals.
  3. Stop worrying about which state is number one.
  4. Stop nonsense about supply management programs.

If some farmers still go under, well too bad.

Nobody guarantees programmers a job. Nobody should guarantee farmers a job either.

Let's not turn the US into France in a misguided effort to save the family farm.

Mike "Mish" Shedlock

Comments (61)
No. 1-34
flubber
flubber

Mish, while I agree that the tariff has added some fuel to the fire, the fire has been burning long before Trump took office. Farming in general is very hard work and very risky. The following link explains some of the difficulties that have been plaguing dairy farmers for years. The tariff could just be the straw that breaks the camel's back, but the load on the camel has been excessive for quite some time. I feel for farmers in general, but it seems as if demand for milk in the USA has been declining for quite some time. Probably going hand-in-hand with the decline of breakfast cereals.

SteveVT
SteveVT

as a programmer for over 30 years, I have had to constantly update my skillset. I now do machine learning. I do not see any parallel for dairy farmers. Do they grow something different, convert their fields into a casino? I have no idea how a dairy farmer adapts. That is a bad analogy in my opinion.

hmk
hmk

This article mentions nothing that makes sense. US farmers could not sell to Canada to begin with so how on earth do steel tariffs affect milk sales. Really? I know you don't like tariffs but don't blame steel tariffs on milk sales to Canada where they were not selling to begin with. All this sounds like is complete mismanagement of production and the arrogance of govt sticking their nose into private enterprise. What I get from this artices i s that the govt is incompetent, not tariffs? If you or they are blaming tariffs please elaborate on exactly what tariffs and how this affected sales.

2banana
2banana

Mish,

You have provided zero data or evidence that Trump's tariffs have caused any harm to dairy farmers. It looks like government centralized market dictates are the real issue.

+++++

  1. Trump's tariffs and the counter-tariffs have killed farmers. End the tariffs
soupcon
soupcon

The use of BGH (recombinant bovine growth hormone) has increased milk production per cow from 540 gallons per year in 1944 to 2,753 gallons in 2017 (https://civileats.com/2018/11/05/whats-behind-the-crippling-dairy-crisis-family-farmers-speak-out/#respond). Of course dairy farmers have gone out of business with the over-supply of milk. Canada does not allow the use of BGH nor would I, as a Canadian, buy milk or milk products made with milk from cows injected with BGH.

tz1
tz1

Grow a mind.

Your own graph shows milk prices STEADY. I'd love to have such a steady market.

You are claiming Milk prices would have gone ballistic if tariffs weren't imposed?

When it is the case of EVERY OTHER small business, you say they died of competition and creative destruction and the free market.

But when it comes to the subsidized crony non-market Milk producers, it is all Trump's fault.

Trump Derangement Syndrome, 0% milkfat edition. Milk farms lose because "orange man bad!". No, how about the same market forces that you say IN EVERY OTHER CASE is merely sorting the efficient and the inefficient, and you won't blame the other countries for IMPOSING TARIFFS ON MILK and say they are going to destroy their own economies because...

Its only bad for the USA and anyone in the USA if they impose IMPORT tariffs, but if China, Japan, the EU, whomever impose tariffs or non-tariff barriers it apparently doesn't matter.

You should be above that. It is the same thing where they blame the Nebraska floods on "climate change" because we aren't doing what GAIA commands.

Stuki
Stuki

Farmers, like other productive groups, are being slaughtered by the Fed and government doing their darnedest to focus on what is their number one priority: To ensure every productive person, from farmers to programmers, are forced at gunpoint to transfer as much of the fruit of their labor as possible, to the idle leeches too incompetent to do anything but sit around owning "assets." Farmland and programmers' houses and offices among them.

In the big scheme of things, noone will get by doing anything productive, as long as the government and Fed keeps transferring more of their output to idle leeches under pretext of idiocies like "ownership society." It just cannot happen. Every penny some idle leech "makes from his house," has to be produced, then taken from, someone doing productive work. The fungi in the walls simply isn't adding value to decaying structures as time goes by.

So, the first groups to fall completely, will be those most exposed. Farmers being one of them. But it's the exact same dynamic which has been reducing the middle class to indentured slumdwellers over the past 50 years as well: Fed and government redistribution of wealth to "asset owners." Away from productive people doing productive work. Whether that work be farming, programming, or whatever jobs it is that those stereotypical p'ed off "Trump voters" have.

There simply is no other way to "save the middle class, farmers, industry nor any other group of productives" than by first halting, then reversing, big time, the government sponsored crass theft that is all that has been going on economically in the West for the past half century, since Nixon decided to destroy what was left of America.

Mish
Mish

Editor

"This article mentions nothing that makes sense. US farmers could not sell to Canada to begin with so how on earth do steel tariffs affect milk sales. Really?"

Yes really. When Trump stupidly placed tariffs on steel countries retaliated with tariffs on soybeans and dairy. The article makes perfect sense.

Trump hurt buyers of steel, nations reacted in a way that hurt the US farm belt. The pain came from Europe, Mexico, Asia etc.

Trump pleaded with China to put tariffs on stuff other than agriculture.

The solution is to get rid of the tariffs. Let the free market decide the winners and losers.

Mish
Mish

Editor

The EU will not discuss agriculture in a trade discussion. Trump will apply tariffs on cars, the EU will respond. both sides lose

Realist
Realist

The problems with US dairy farmers is complex. As usual, Mish is trying to blame something he disagrees with (in this case tariffs) for the problem. That’s a bit of a stretch.

First, Mish is partly correct about the new NAFTA. If it is signed, it would allow US dairy access to a tiny part of the Canadian market. But Canada is a tiny market compared to the US in the first place. So a tiny part of a tiny market isn’t going to make much difference to US dairy farmers anyway. Signing the new NAFTA would be promoted by Trump as a yuge win for farmers, but then he is never about truth, he is all about promotion: of himself.

Second; Trumps continuing metal tariffs are holding back Canada and Mexico from ratifying the new NAFTA. So Mish is partly correct here as well. But the US might not ratify NAFTA anyway. So what difference do metal tariffs really make if the US doesn’t ratify.

Third; paying farmers to overproduce something that can’t be sold, and is often dumped in fields, is a ridiculously bad policy. This is the the bigger issue. The fact that the US subsidizes agriculture as much as it does, is actually the biggest problem here.

Fourth; most Canadians would not buy US dairy products because they don’t want to be consuming the added hormones. But if the dairy products were bought by restaurants or food processors, many Canadians would be unknowingly consuming US dairy. But as I said earlier, even if US dairy found a way to sell in Canada, it would still be a drop in the milk bucket.

Fifth; supply management would be a better policy than what the US has now, if you want to prevent “family farms” from being run over by big agribusiness companies. Supply management costs the government almost nothing, and would save tens of billions in agricultural subsidies each year. On the other hand, if you don’t care about “family farms” you don’t need supply management. Let the marketplace decide who survives.

Greggg
Greggg

Don't know how much it is now, but a few months ago, milk was $1.17/gallon. The trouble signs have been there for years and years, and the gig is up now even after years of subsidies.

Carl_R
Carl_R

Besides the issue of BGH, which I think is clearly a factor, this article is a good reminder that the purpose of farm subsidies is not to help farmers. They hurt farmers by encouraging over-production, and keep prices low. No, the reason for farm subsidies is to assure low food prices, and to make sure there is never a food shortage. The fact that farmers are deluded into thinking they benefit them is an additional benefit, of course, in that it gains votes for representatives that support them, but the true reason is to assure over-production.

Casual_Observer
Casual_Observer

And I just read an article about how Trump will win 2020 and it wont be close because economic growth is accelerating.

Casual_Observer
Casual_Observer

Seems to me the issue is it is impossible to keep 160M American adults employed and prosperous. Right now we have elections based on about 33% of the electorate. If the system really falls apart there will be a civil war and it will not be pretty.

Casual_Observer
Casual_Observer

Finally where is the quality issue in all of this. I went to remote parts of the west and the dairies and ice cream shops were 1000% better than anything from the grocery store. Does anyone trust only price as a measure of quality ?

Je'Ri
Je'Ri

BGH in US-produced milk, GMO Corn, GMO Soybeans, GMO Beef, and Chlorinated Chicken, among many other things: I would think these FrankenFoods are doing far more to supress foreign demand for US agricultural products than Trump's trade policies.

Sechel
Sechel

Richard Lugar died this weekend. He had great insight on people and issues even if his record wasn't 100% what I would like, he got it right , far more frequently than he got it wrong. He saw the value of free trade and how NAFTA benefited this country far more than it hurt it. He saw that Trump lacked any prior gov't experience and was against trade. It's actually amazing the economy has done this well in light of Trump's attack on American exports. Probably the tax package which ballooned the deficit has helped. Seems farmers , one of America's success stories are taking the brunt of the punishment

Six000mileyear
Six000mileyear

A more complete analysis would include annual numbers of dairy farm bankruptcies, new dairy farms, herd size, gallons produced, and prices in Canada and Europe.

ReadyKilowatt
ReadyKilowatt

Seems to me there's a larger issue if the farm has been around for 100 years and all the sudden because of one variable change it goes tits up. And why didn't they diversify into something else? They could have put up a few wind turbines and got some more government subsidies and a nice check from the local power company.

Realist
Realist

Hey Ready Kilowatt.

Agriculture has already been changing for the last 200 years. That’s why agricultural employment has dropped from over 90% of the working population to less than 2%. (Direct on-farm employment is 1.3%). Human ingenuity has automated agriculture to the point where there just aren’t many jobs left. The question here is not about saving “jobs”, it is about saving “family farms” (assuming you want to save them).

Modern agriculture is about massive agribusiness companies that are hard for smaller operations to compete with; think Amazon or Walmart vs a ma and pa shop. Family farming is no longer the nostalgic ideal that is often portrayed in the media. And despite their best efforts, family farms just can’t compete in mainstream agriculture, though they can continue to exist in niche markets.

Trump (and most other politicians) use the nostalgic family farm ideal to win votes, but he doesn’t really give a damn about them. They’re just a prop.

If you really want to save “family farms” you need to use a supply management system. Otherwise, the family farm is doomed to disappear due to competition from massive US agribusiness companies. Subsidies, tariffs, and pointing fingers at other countries is nothing more than mis -direction.

Menaquinone
Menaquinone

I buy American sharp cheddar for $2.60/lb. I buy Danish feta for $2.00/lb. I buy Turkish labneh for $2.00/lb. I don't buy milk because it is over priced at $2.60/gallon, and all the goodness was skimmed off for butter. I pay $3/lb for butter. Price supports and industrial mush products are killing American farmers. Advertise real milk for $1/gallon and I'll be there to buy ten gallons every month. Don't blame Trump. Blame the milk consortium monopolists.

gdpetti
gdpetti

Yeah, this is the result of a long process... as mentioned... but one point I haven't seen anyone comment on is the use of the word 'bankrupt'.... for Trump and his WallStreet friends, it's merely a sidestep to keep going... not so for these small farmers/ranchers/businesses... for them, it's the end of the road. I think this is an important point to recognize... DC/WallStreet and corporate types simply aren't affected by this as much... it becomes a writeoff... not a killer. They just don't 'get it'... because they've not had to deal with it... at least in a very long time, since joining the beltway boys, where bankruptcy is just some more 'shits and giggles' in the con game we call govt. But not to worry, this OWO puppet show is on the outs, their puppet masters are about to pull the rug out on it and introduce us to their NWO.... and time is running out before the real 'black swan' event occurs.. Mother Nature's cyclical 'cleanup' op.

NativeWI
NativeWI

Mish, lots of factors at play here, but you are too quick to blame Trump tariffs. You said it yourself...

"The new North American trade deal, which is supposed to give dairy farmers more access to Canada’s tightly controlled market, has yet to be ratified by Congress and may never be approved given Democratic opposition."

So why not blame the Democrats for holding up a trade deal that would give farmers more access to other markets? A trade deal I might add that was a result of pressure brought on by Trump's tariffs.

FromBrussels
FromBrussels

Why can small and medium sized european farmers hardly make both ends meet and are increasingly abandoning farm and fields ? Tariffs ?

Aaaal
Aaaal

BS. The milk we buy is typically $5/64oz. The milk I prefer is $18/gallon.

jivefive99
jivefive99

Our country was never so successful and productive than when tariffs were imposed against foreign suppliers not so long ago.

stillCJ
stillCJ

Editor

Observations on this article: The chart of milk prices shows that the 1/3 price decline happened in 2015 when Obama was president, oh but let's blame Trump anyway. The article does explain that the access to the Canadian milk market was negotiated by Trump, but not ratified due to democrat opposition. Democrats will do anything to hurt Trump, no matter who else is hurt. Under "Meddling" points 1-4, #2 and 3 are already done. #4 has nothing to do with Trump. As for #1, debateable: Wisconson has been losing dairy farms for a century already. Maybe we need to get Americans to drink more milk: https://dfwblobstorage.blob.core.windows.net/ewcmediacontainer/eatwisconsincheese/media/content/statistics/lg_us_fluid_milk_consumption_10yr.gif Pretty illogical to blame Trump for this trend:

stillCJ
stillCJ

Editor

I'm pretty sure the animal in the photo with the farmer's wife is a goat, not a cow. But hey it's a NYT reporter, why would anyone expect him to know a cow from a goat?

Brother
Brother

5 years ago Milk prices were at an all time high so it's hard to imagine Trump is to blame.

ksdude
ksdude

Fart queen AOC will probably ruin her future beef plans. Maybe she should raise cockroaches instead and learn to process them.

Webej
Webej

Canada is neither the cause or the solution to American diary farm woes. Supply management costs the government nothing, and is favoured by 87% of the population. There's not many thing with such unmixed ratings, even though Mish dismisses it as foolish without further ado (ideology). Supply management cannot be compared to the USA or Europe where there are large scale subsidies. In Europe to benefit family farms, but in practice, everywhere, it always seems the most money flows to the parties that need it the least.

inonothing
inonothing

I'm allergic to cow's milk. Last year, I discovered goat's milk. Costs $5 per quart at Whole Foods. I can't get enough of that stuff. I buy between 2 and 3 quarts a week. Why can't dairy farmers switch? The store nearest me runs out every month.

AussiePete
AussiePete

As a matter of interest, a few days ago it was reported locally that a Queensland invention can keep milk fresh for 60 days, thereby opening up new overseas shipping markets. The government Dairy Food Safety authority took two years to evaluate it and has declared it, "better than pasteurization"...