No industry is immune from disruptions, but dairy can survive and thrive through innovation, building relational trust and being active participants in government, speakers told producers and allied industry representatives during the 2023 Dairy Strong conference. The event, held Jan. 18-19 in Madison, Wisconsin, attracted about 400 dairy producers and allied industry representatives. It is hosted annually by the Wisconsin-based Dairy Business Association and is co-sponsored by sister organizations Edge Dairy Farmer Cooperative and Farmers for Sustainable Food.
Jones encourages innovation
Terry Jones, entrepreneur and founder of Travelocity.com, encouraged dairy producers and agribusiness leaders attending Dairy Strong to be more innovative in an increasingly technology-driven world rather than allowing others to disrupt their businesses.
“Things are moving faster than ever these days,” Jones said. “It’s not a matter of if there will be disruption to your business – rather, it’s a matter of when.”
Jones said a key to addressing disruption is to look at and apply basic skills while being open to new business models. Using communication technology will enable dairy producers to stay connected with their customers and employees, while artificial intelligence and automation provides constant connectivity with cows, enhancing productivity and animal health.
Jones also noted that having the right culture and team, including a life coach, is essential. Building a culture that supports experimentation and having team members willing to try and fail will lead to success, he said.
“Figure out where you want to be,” Jones said. “You can get there.”
Mann: Connect
In his address, Lt. Col. Scott Mann, a retired lieutenant colonel, former U.S. Army Green Beret and leadership expert, described how building human connections is a foundation for trust.
Citing a recent national survey, Mann said two-thirds of Americans do not trust their neighbors. He said people only share 20% of what is happening in their lives, partly because technology has led to isolation and dramatically changed public behavior.
“We live in a world of churn,” Mann said. “People are distracted, disengaged and disconnected.”
To counter that, Mann said there was power in human connections. He encouraged farm and organization leaders to discuss their purpose or “why” with their teams. Through storytelling, including a willingness to share their own personal struggles and vulnerabilities, leaders can open the door to connection and build stronger teams.
“No matter what you do with your life, you have to leave your tracks in this world,” Mann said.
Dairy consumption positive
Phil Plourd, president of Ever.Ag Insights, provided an overview of U.S. and international dairy markets. Identifying multiple factors, he said the dairy story was positive.
“The death of dairy has been wildly exaggerated. It’s really not true,” he said.
Plourd noted that annual USDA dairy product estimates showed per-capita consumption jumped in 2021. And while fluid milk sales draw attention as a negative, the increase in cheese consumption over the years has replaced all volumes lost in fluid consumption.
Cheese and butter have also replaced fluid milk in another area, Plourd said. Beyond consumption, food retailers “love” cheese and butter promotions because they draw consumers to their stores.
Much of the fluid milk sales decline can be directly attributed to changes in breakfast-eating patterns. “If you want to talk about the single biggest problem that fluid milk has encountered over the past 15 to 20 years, it's been that cereal has gotten in trouble,” he explained.
Plourd anticipates shrinking U.S. dairy producer income margins in 2023, with the potential for wide income gaps based on geography and favoring the Midwest.
Export markets critical to future
Will Loux, vice president of global economic affairs with the U.S. Dairy Export Council (USDEC), said a critical function of USDEC is seeking milk market balance, striving to grow export sales to find a home for increased U.S. milk production. Simply cutting milk production would not apply that balance across all categories, he warned.
Loux noted that U.S. production and consumption of milkfat is fairly well balanced, with about 95% of production consumed domestically. In contrast, the U.S. consumes only about 80% of total protein production, creating the need to export excess production. Reducing milk production based on protein would require increasing imports of milkfat, he said.
Exports are also critical to supporting U.S. milk prices, he said, especially Class III milk prices with sales of cheese and whey in 2022.
Finally, Loux said, the export market has greater potential for growth than the domestic market. “We see growth in both, and I think they’ll need to work in tandem,” he said.
Making a difference in government
Three Wisconsin farmers shared experiences and insights as elected officials in town, county and state government. Panelists included Rep. Travis Tranel, a fifth-generation dairy farmer who is serving his seventh term as a member of the Wisconsin State Assembly, including chair of the Assembly Ag Committee; Justin Peterson, western Wisconsin farmer serving on a town board; and Audrey Kusilek, northwestern Wisconsin farmer serving on a county board. Each urged other dairy producers to take an active role in government, either in elected positions or on committees.
Despite a 24-hour news cycle that highlights political partisanship, Tranel said the divide in state government frequently pits “urban” against “rural.”
“Agriculture is a 105-billion-dollar industry in this state,” Tranel said. “It's our second-largest economic driver; we employ about 430,000 people. We are not a stepchild or a second-class citizen in the state, and sometimes we get treated that way. I am very adamant within our caucus to make sure that rural Wisconsin has a seat at the table.”
10-year outlook
Three Midwest producer panelists shared how current conditions are impacting their dairy businesses, while looking ahead to the issues that will drive the industry through the next decade.
Lee Kinnard of Kinnard Farms in Wisconsin said a crucial piece of information driving the future of dairy is understanding what consumers want. Additionally, as automation and technology increase as vital tools for dairy management, so will the need for a sophisticated workforce with a strong background in science and math. “I’m very bullish on dairy and agriculture in general,” Kinnard said.
Christina Zuiderveen, managing partner of three farms in South Dakota and Iowa, said one of the challenges she faces is that processing growth continues to lag milk production growth. Looking ahead, “I’d like to know where processors are going to build,” she said. “I’d also like a crystal ball to see what environmental regulations are going to show up.” One thing that excites Zuiderveen about the future is the export market.
Brian Houin of Homestead Dairy in Indiana said an understanding of domestic and global markets, along with the potential to manage through “black swan” events impacting those markets, would be critical in the next 10 years. He said supply chain issues are a challenge to an aging dairy infrastructure, while “net zero” goals related to greenhouse gas emission and evolving carbon markets will impact strategic capital investments on farms.
Quantifying sustainability
A panel discussion with business analysts and dairy producers focused on Profitability in Conservation. “First and foremost, [farmers] are going to pay the bills, so that financial viability is critical,” said Keith Olander, executive director of AgCentric – Minnesota State Northern Center of Agricultural Excellence.
“But on the other side, they want to do everything they can for the improvement and health of their herd, as well as the land,” Olander added. “How do they balance that to make that happen?”
To prove or disprove whether farms are going to maintain profitability through conservation practices, Olander is involved in several case studies. In working with the Headwaters Agriculture Sustainability Partnership (HASP), a case study of farms in Stearns County, Minnesota, is showing signs of strength in production, yield and profitability for farms implementing sustainable practices.
Tom Gregory, owner of Mill Creek Dairy Farm, was one of the founding farmers in HASP and shared his firsthand perspective in adopting conservation practices. Gregory first attempted cover crops with barley on 200 acres. He said it grew well but was a disaster to harvest. They then tried triticale, peas and oats before settling on rye. “Rye has been a lifesaver for us. It works really, really well,” Gregory said, noting they utilize it in all heifer and cow diets on the farm.
Kory Stalsberg, farm business and production management instructor with Southwest Wisconsin Technical College, has been working on a project with the Farmers for Sustainable Food and the Lafayette Ag Stewardship Alliance (LASA) to complete a full financial analysis on four dairy farms that use a minimum of five conservation practices.
After three years, they were able to identify and gather results from three cropping enterprises across the farms – corn grain, corn silage and alfalfa. Compared to average data for Wisconsin farms, the farms utilizing conservation practices did have a higher direct cost of production in all three enterprises. However, they also had higher yields that led to greater returns per acre, Stalsberg reported.
“It feels so good to look at that data and know that we’re doing something right,” said Cody Carpenter, who dairies near Darlington, Wisconsin, and is a member of LASA.
In another session focused on building healthy soils to reduce greenhouse gas, researchers outlined the beginning of one of the largest dairy soil health research studies, reaching across six major milk-producing states, and discussed manure’s impact on soil health.
Dr. Mara Cloutier, project manager and soil scientist at the Soil Health Institute, said manure – as an organic product that has carbon, nitrogen, phosphorus and a lot of microbes – is good for soil health.
“Manure definitely has a place, and dairy farming has a place, as part of the solution to our environmental problems,” she said.
The 2023 Dairy Strong also featured “Innovation Stage” presentations highlighting research, technology, products and services addressing sustainability, climate change, management and profitability. For further information, click here.
Dairy Strong 2024 will be held Jan. 17-18, in Green Bay, Wisconsin.
