What is the future of Marathon County ag?
FOCUS ON AGRICULTURE
Smaller dairies decline, while profit-starved cash grain on the rise
1. Ralph’s lament
What is the future of Marathon County agriculture? Can the dairy industry survive here with chronic low prices? Will more and more cropland acres transition to corn and soybeans?
Nobody wants to know the answers to these questions more than Ralph Bredl, a fourth generation dairy farmer in the town of Day.
Bredl owns Harmony-Ho Farms with his wife, Sharon. They run a 500-cow freestall dairy and use their own milk to make gourmet cheese in an old, traditional cheese factory they purchased in the town of Rietbrock.
The Bredls would love to have their daughter, Martine Bredl Lueck, take over the business as a fifth generation successor, but all Ralph Bredl sees is storm clouds on the horizon. For the past five years, he recounts, dairy prices have been poor and he has operated “in the absence of profitability.” Now, with the COVID-19 pandemic, he has watched the bottom fall out of dairy prices. Milk processors have dumped milk in farm manure pits.
Bredl started in the dairy business milking 60 cows in his grandfather’s little red barn. In 1998, Bredl made major freestall investments in the family dairy. Now, however, after 15 to 20 years of use, these assets need to be replaced.
Bredl recognizes the need for another major reinvestment, but, given the state of the dairy industry and what he sees as a troubled future, he finds himself lying awake at 3 a.m. wondering what to do. He questions whether to roll the dice and invest in an industry that hasn’t seen a dime of profit for years.
“I am in quandary,” he said.
Bredl said the current trendlines in the local dairy industry are plain. Marathon County will be home to lifestyle dairy farmers, notably the Amish and Mennonite, he said, but, increasingly, a greater percentage of the county’s milk will be produced by ever larger dairies owned by people with “a strong stomach for the game” who are “extreme risk takers.”
He predicts an increasing number of smaller and midsized producers will throw in the towel and, in their place, their land will be rented out to corn and soybean growers, even though there is “absolutely not” any money to be made this far north in cash grain.
Bredl said he has over the decades done everything a dairy farmer was supposed to do. He invested in a modern operation, improved his production efficiency and, in purchasing a cheese plant, turned his milk into a value-added commodity. Still, he said, all of these efforts have failed to generate more than one profitable year in five. The price of milk has skidded year after year. “Everybody says more efficiency,” he said. “But that’s a false frugality.”
Bredl reported he has been running full speed on a treadmill but, economically, getting nowhere.
“And, personally, I’m exhausted,” he said.
Bredl said globalization of the dairy industry is the underlying cause of his problems. He says the world is awash in cheap milk. He sees no difference between his situation and that of a machine shop operator who, despite his skills and expertise, can’t compete on price in the world marketplace to make this or that component. The machinist can win jobs, said Bredl, but not profitably.
The dairy producer said much of agriculture has become consolidated over the past decades. A few companies control chicken and hog production, he commented. The dairy industry has resisted this consolidation, he claimed, largely because dairy farming is more art than science. “You can take this many chickens and these many hogs and so many pounds of feed and, in the end, you know how many pounds of meat and poultry you are going to get. It’s a science. But that’s not the case in dairying. You can have so many cows and so much feed, but you really can’t predict the amount of milk you are going to get.”
Still, Bredl sees individual dairies across the country getting larger, milk retailers running their own dairies and large corporations purchasing numerous dairies in order to command top dollar in the milk market through volume sales.
“What’s driving this is maximizing yield,” he said.
Bredl said 50 years ago there were families that would tend to their small herd of cows every day. The parents had no freedom. Their children had no freedom. The family earned a basic existence.
If dairies are getting bigger, it’s because most people refuse to live that way, Bredl noted.
“It’s not an acceptable way for people to live,” he said. “That system has been broken.”
Bredl said he doesn’t know how dairies are supposed to earn a profit in today’s marketplace.
In the past, he said, you could count on technology to give you an edge. The chisel plow was a godsend, he said, a huge improvement over the moldboard plow he grew up with. The Total Mixed Ration (TMR) mixer was another useful invention, he said.
But, sooner or later, Bredl observed, these inventions became industry standards and any individual dairy farmer lost a competitive advantage.
“It’s surreal,” he lamented. “You have everybody on their knees.”
Bredl doesn’t put much faith in the government to turn farming around. Local government can do nothing, he claimed. Only a national government can attempt to fix agriculture. But the record here is poor, he observed.
Bredl said European Union (EU) had a quota system to restrain overproduction for years, but this supply management system only caused its dairy industry to stagnate. If dairy farmers had cash to invest, they spent it on projects outside the dairy. “They diversified into less regulated commodities,” he said. Then, Bredl said, the EU ditched the quota system. The dairy sector, however, failed to revive. European dairy producers are in as much trouble as their counterparts in the United States.
All of this makes Bredl uneasy, agitated. He feels part of an industry that is moving in a direction that may leave him on the sidelines.
“The trend lines seem firmly in place,” he said.
So, what, then, is the future of Marathon County agriculture? Is it all gloom? Could there be a bright spot? How should we think about all of this? And if you are Ralph Bredl, what do you do?
We searched for people with an agricultural crystal ball. We found three: a small dairy farmer, a UW-Madison professor and a local ag consultant. Each told us about a different county in the United States that could be Marathon County’s future.
Let’s then check out three of these different futures.
Martine Bredl-Lueck and family
