Agriculture responds to COVID-19

Updated: 6:45 p.m., 4/3

SHAWANO — The state has been given contradictory views of the impact of COVID-19 in the last 48 hours, Jeff Strassburg observed on Friday.

The Dairy Farmers of Wisconsin (DFW) board member and member of the Land O’ Lakes cooperative board said the farms dumping milk have been confined to seven southeastern Wisconsin and a few western counties while some grocery stores in the Eastern U.S. have no dairy products on their shelves.

Strassburg is not dumping any milk from his 1,000-cow herd on his farm north of Bowler as the co-op continues to pick up milk on its regular schedule. He hasn’t heard of any local producers dumping milk and only one local processor dumping milk.

“It looks pretty bad right now, but we still have to be a little optimistic that the end of the world isn’t coming. We’ll get back to business-as-usual sometime,” Strassburg said, after the country weathers what he termed “trying times.”

Strassburg noted there are fewer limits on dairy product purchases at grocery stores across the U.S. as hoarding has apparently leveled off.

Strassburg sounded a hopeful note for dairy consumption in a post-COVID future, “The upside is that people are going back to the basics – milk, cheese, putting milk on cereal.” He said perhaps those changes, including cooking more meals at home, will become permanent.

Just as contradictory are the national sales figures for dairy, Strassburg said he provided DFW data showing retail sales of dairy products have recently climbed 50-74%, including a 54% jump in the Great Lakes states. He added sales of bottled milk have gone up by 50%, despite the loss of sales to school lunch programs.

Strassburg blamed the pandemic for causing disruptions in the supply chain, such as a shortage of drivers to get dairy products from their source to empty markets. Another blow from COVID-19 is the closure of schools and restaurants, known collectively as “food service,” Strassburg added.

That doesn’t mean local farmers aren’t affected. Prices have plummeted in recent days and probably will settle at a four-year low of $12-13 per 100 pounds of milk for Class III futures, the kind used in cheesemaking and a benchmark price for the industry. Strassburg echoed the concerns of other farmers that it costs $16-18 to produce that 100 pounds. “The financial stress will be real for some people,” he said.

Strassburg recommended that dairy producers feeling strain of the current situation access counseling services through the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) and its Farm Center.

The Farm Center works one-on-one with farmers and their families with its no-cost services available for new and experienced farmers. DATCP also has a counseling voucher program for mental health services.

The Wisconsin Farm Center is available at 800-942-2474, Monday through Friday from 7:45 a.m. to 4:30 p.m. “You’re not in it alone,” Strassburg said.

Strassburg also hoped that sign-ups would again be open for the Dairy Margin Insurance Coverage (DMC). The federal program, authorized under the 2018 Farm Bill, is a voluntary risk-management program for dairy producers when the difference between the all-milk price and the average feed price (the margin) falls below a certain dollar amount selected by the producer. Enrollment ended in September 2019.

DFW is reaching out to businesses to donate money to buy dairy products for food pantries and to persuade other processors to take on the surplus milk to make dairy products for food pantries, Strassburg said. A DFW campaign under the theme “We’re here for you,” is getting started.

Drastic changes this week

Just three days earlier, Strassburg and two other area farmers agreed the COVID-19 impact to date has had its pluses and minuses but were expressing some level of optimism.

“On the bright side, we do get to spend a lot more time with family,” said Seth Berg, Cecil.

The closure of schools and stores means there’s more time for eating dinner together, something often made difficult by the schedules of the Bergs’ six children, he added.

Hank Wagner, Oconto Falls, agreed, noting he and his family work together every day, but now they’re also spending more time during off hours and doing things such as playing games.

“And we rely on God to get us through the next day,” Berg said.

Berg also noted the good work done by the School District of Bonduel, especially Superintendent Joe Dawidziak, in providing online instruction and delivering lunches.

“It’s amazing in times like this, people are stepping up and doing the right thing,” Berg said.

Berg has also heard of meat at grocery stores selling out, but “people are coming up with different strategies on food sources, like coming directly to farmers,” he said. “It may wake people up on where their food comes from.”

The Bergs sell one or two beef cattle each month. That trend may continue, which would be a good thing for farmers, Berg said.

“If you really look at it, there is a long list of positive things people are doing,” Wagner said.

Strassburg said Tuesday that he had been on the phone most of the day and expressed the hope that after this crazy time, he’d be able to get back to farming.

Wagner said people are making adjustments in how they do business. This includes different ways of communicating — especially with insurers and bankers, Wagner added, which will help shorten the pandemic.

“We’re all in this together,” Wagner said.

Employees

Another challenge for dairy farmers during the COVID-19 pandemic is keeping employees healthy and on the job. Wagner praised his staff as being central to his farm’s success and added they are taking all of the extra steps to protect themselves and ensure a healthy work and life balance.

“If any of them get sick or anyone in their family gets sick, we tell them to stay home,” Wagner said.

The Wagner farm provides housing for all of its employees but one, he continued.

The Strassburg operation north of Bowler has 15 employees, and they’ve been advised on limiting contact with people and “washing hands unbelievably often,” Strassburg said.

Their employees, who live in housing provided by the Strassburgs, are currently all healthy, “and we’re hopeful they stay that way,” Strassburg said.

Supplies

For Berg and his diversified farming operation, “Right now, the only thing we’ve been told is that the gloves we use for milking may be in short supply, and we may have to wait,” he said Tuesday morning regarding shortages.

He said the parts and other items he uses in his farm equipment repair business have been readily available. The Bergs observe social distancing by requiring that deliveries be left outside their doors.

Wagner said almost every one of his suppliers has had challenges, but his family dairy operation works with them to solve problems. For example, Wagner said his farm is limited to ordering the same amounts of paper products as it had previously.

Wagner added some suppliers aren’t taking on new customers.

He noted that repair and maintenance people have also been available when needed.

Feed and its ingredients are a farm’s biggest expense, Wagner continued. Feed companies are asking that he keep a larger inventory on hand, a week’s worth, than previously.

Some feed elements that have to be shipped longer distances may also be a problem, but the animals have to be fed, Wagner said.

Strassburg termed the supply situation for his farm as business as usual.

He added their feed supply was more affected by the wet conditions and winterkill of alfalfa in 2019, but he feels they’ll have the feed they need.

Threat of plants closing

One of the biggest concerns for dairy farmers has been signals from processors that their plants may have to close due to COVID-19 or supply outages, Wagner and Strassburg said.

There’s no guarantee that insurance will make up losses from milk that has to be dumped, Wagner said. For his operation, that could amount to $10,000 per day.

Wagner said some processors have asked for cutbacks in production. The lifelong farmer said the only sure way to cut production is to sell cows, and that was unacceptable for long-term success.

Strassburg said hiccups in the food packaging and production chain for things like milk jugs may result in temporary outages or disruptions.

Although still in the planning stages as it’s too early to do field work, Berg anticipates his custom tillage and planting services will be in demand at about the same level as previous years.

Berg is concerned the price of milk may drop to $12 or $13 per one hundred pounds. “That makes our lives harder when the cost of production is $17. That hurts our bottom line,” he said.

He urged consumers to buy that extra stick of butter or extra pound of cheese, as he’s heard rumors of people cutting back on those purchases.

Strassburg and Wagner added their desire for people keep buying and using dairy products. Strassburg said the aim was to do the best for both farmers and consumers.

Markets

What Strassburg also termed a “hiccup” is the loss of food service sales, especially restaurants. Strassburg put the volume at 90% of normal.

“What was the norm three or four weeks is no longer the norm,” Strassburg said.

One of the reasons for the historic downward trend in bottled milk sales has been the decrease in cold cereal eaten at home. Enforced changes from the pandemic mean that people are once again buying cold cereal and put milk on that cereal, Strassburg said.