Tariffs hurting dairy industry in Wisconsin
WATERTOWN (CBS 58) - Another of Wisconsin's most important industries is being hit by the recent trade war.
Milk prices are falling, and it's costing farmers potentially thousands of dollars a day.
At the start of the summer, milk prices were projected to go up, but that was before tariffs were slapped on countries like China, Canada and Mexico, and they retaliated on milk and cheese.
Now the prices are falling. The average price of a gallon of milk is about $2.74, and while that may be good for you and me, the dairy industry is wondering just how low it will go.
Local dairy farmer Daphne Holterman is part of the Wisconsin tradition.
“We produce milk and it goes to Saputo in Waupun and it's made into cheese for people to enjoy,” said Holterman.
Rosy-Lane Holsteins has about 24 employees, raising dairy cows and growing the food they eat.
“We produce about 1 ½ tankers of milk every day,” said Holterman.
Milk is 90% of the farm's income, so any shift in prices can hit hard.
“The highs are higher for milk prices, the lows are going to be lower, and we don't know when either one is coming,” said Holterman.
“As we go into July and August, some of that pain is going to begin to be felt,” said Mike North.
North is from the Dairy Business Association. He says that milk prices were projected to hit $16 per one hundred pounds of milk in July, but since tariffs were put in place that price has dropped more than $2.
“So if you have a 1,000 cow dairy, you've essentially just lost $2,000 a day from where we were back in the first part of the month,” said North.
The ripple effect spreads throughout the industry. Sartori cheese, a company that gets all their milk locally, is also being stung by tariffs.
“I have yet to find an example where tariffs have worked for the long term good of the country that first imposes them,” said Jeff Schwager, President of Sartori Cheese.
They were recently featured on the CBS Evening News sharing their concerns.
Asked if Schwager thought the tariffs were a bluff, he responded, “I don't know that it's a bluff, but I sure hope there's a strategy behind this.”
“Just being aware of what happens on the world stage is very important,” said Holterman, who has her eye on the rest of the world market.
“I never would have dreamed when we got out of college 30-some years ago that we would care about what happens in China and India,” said Holterman, “but that impacts us every month now with our milk price directly or indirectly.”
But Holterman remains optimistic that this price dip won't do in Wisconsin farmers.
“Whether your 77, 27 or even 7 years old, I think farmers are very resilient, we're creative and I think we have a can-do attitude that will prevail,” said Holterman.
Low milk prices help the consumer, but industry experts worry that if prices stay too low for too long, we'll start to lose dairy farmers in the state.