Editor's note: Due to space limitations, this article will be divided up and run over the next several weeks, or it can be viewed in its entirety at www.thecountrytoday.com.
SHEBOYGAN — Wisconsin Dairy Task Force 2.0 members passed 49 of the 51 recommendations on which they voted during the group's full meeting on March 15 in Sheboygan County.
The recommendations were developed by task force members with the intent of maintaining a viable, profitable dairy industry in the state.
Wisconsin Dairy Task Force 2.0, with nine sub-committees, was created in June 2018 as a joint effort between the Department of Agriculture, Trade and Consumer Protection and the University of Wisconsin System.
“I do believe the decisions that have been made here over the last few months of this task force … it will set the course for the next 20 to 30 years,” said DATCP Secretary Brad Pfaff, who participated in the March 15 meeting.
In advance of the meeting, Gov. Tony Evers commended the task force members for their leadership and dedication.
“I appreciate their valuable contributions as we consider today’s significant challenges and tomorrow’s great opportunities for Wisconsin’s dairy industry,” Evers said. “Their input will certainly help my administration better connect the dots and make an impact on state and federal agricultural policy discussions going forward.”
Task force members ended the meeting without finalizing their next steps. For more about the task force, visit https://datcp.wi.gov/Pages/Growing_WI/DairyTaskForce.aspx.
Here are summaries of the 49 approved recommendations, including the sub-committees that presented them, the vote totals, and the problem statements and recommendations as presented by members (some summaries are condensed due to space):
RESEARCH AND INNOVATION SUB-COMMITTEE
Topic: Recognize the importance of exports to Wisconsin dairy.
Problem statement: The United States exports only about 5 percent of its cheese. Exports are a huge, virtually untapped growth opportunity for the cheese industry.
Recommendation: Wisconsin needs to develop a plan and strategies that help cheese makers to produce new products successfully targeted for export markets, to provide smaller plants with logistical support needed for transporting products to distant markets, and to obtain greater consumer insights on the types of products required in key overseas markets. Wisconsin should consider developing a Wisconsin Cheese Brand and a Dairy Export Board that help grow and support the dairy export business. Vote: 25-1.
Topic: Increased collaboration in the UW System and with private industry.
Problem statement: There are world-class scientists within the UW system, including experts on cheese science, cattle genetics, microbial fermentation and consumer science. But some funding programs like the dairy checkoff make it difficult to do some types of collaboration between these experts. And those within the dairy industry aren’t always aware of UW System research that could benefit them.
Recommendation: Funding opportunities need to be explored/developed that allow for new, unique, impactful ideas to be explored that could provide significant benefits to the dairy industry by leveraging the cross-disciplinary expertise within the UW System. The task force encourages greater engagement between researchers within the UW System and the dairy industry so their research quickly benefits farmers and processors. Vote: 25-1.
Topic: Regulatory changes needed to FDA product standards of identity.
Problem statement: The dairy industry has many standards of identity that tightly regulate ingredients and how products like cheese, milk and yogurt are made. Most of these standards have not been substantially changed in several decades, and do not take into account new processing technologies and innovations. This puts U.S. dairy manufacturers at a competitive disadvantage, since European dairy companies can use these technologies to make products more efficiently than those in the United States, as well as produce some new types of value-added products.
Recommendation: Encourage the FDA to update and modernize standards of identity for dairy products that hinder product innovation, such as recent technologies for milk concentration and membrane filtration. Vote: 26-0.
Topic: Increase in dairy processor grant funding.
Problem statement: DATCP awards dairy processor grants annually on a competitive basis. Applicants are licensed Wisconsin dairy processors who are seeking opportunities to innovate and develop new dairy products, increase efficiencies in their plants, expand or modernize existing facilities, or plan for new plant or processes. Requests to the grant program are nearly two to three times the amount of available funds.
Recommendation: Have the state increase funding of the dairy processor grant program from $200,000 to $400,000 annually. Increased funding will promote and encourage growth and innovation in Wisconsin dairy plants. Vote: 26-0.
Topic: Need to engage with state and federal government leaders.
Problem statement: Challenges facing the dairy industry are complicated and constantly evolving. To ensure continued support and secure necessary policy changes, the industry must enhance efforts to communicate challenges effectively to all stakeholders, including government leaders.
Recommendation: The task force recommends dairy farmers, processors, dairy-related trade groups and businesses work together to increase and enhance communication and education efforts with state and federal government leaders. In addition, dairy industry leaders should develop a comprehensive federal and state legislative strategy. This will include assisting stakeholders in identifying and contacting local legislators and key legislators who serve on committees that directly engage with the dairy industry. The industry will provide guidance on how best to engage with legislators in person, by phone and digitally. Vote: 26-0.
Topic: Staffing analysis at Center for Dairy Research and additional state funds for full-time positions.
Problem statement: The CDR has been a crucial partner in the growth of the Wisconsin dairy industry. In 2012, dairy processors and the state partnered to raise funds to construct a state-of-the-art research and training facility for the CDR. The facility is under construction, but no new state funding has been proposed to expand the number of CDR researchers, food technologists, trainers and outreach personnel. Currently, about 4 percent of the CDR operating budget comes from state funding. A facility is only as useful as the minds that inhabit the building.
Recommendation: Devote significant additional state funding to the CDR for additional faculty and staff at UW to accelerate value-added cheese and dairy product research and development. The task force recommends CDR leadership prepare an analysis of staffing needs to optimize the capability of the new facility and share the report with industry and legislators to guide the implementation of additional funds. The task force also recommends additional funds be allocated in Wisconsin’s state budget to support new full-time staff positions at CDR. Vote: 27-0.
Topic: Emphasis on value-added and specialty cheese in Wisconsin.
Problem statement: Growth in cheese, particularly specialty cheese, and incubation of new styles and new processors, is paramount to continued demand for quality Wisconsin milk. High volume cheese such as cheddar and mozzarella are crucial commodities for Wisconsin’s processing companies and cooperatives. However, there is increasing pressure on this portion of the dairy market with a number of large-scale processing plants being built across the nation. With Wisconsin’s strength in innovation, and an existing specialty cheese infrastructure, the task force believes research and innovation in specialty and value-added cheese is vital to the stability and growth of the state’s dairy industry.
Recommendation: Conduct an in-depth consumer study to uncover new products, uses and preparations for cheese, with results shared with all processors in the state. Also, conduct an economic and engineering study to evaluate methods for shared cheese production spaces for startup operations, enabling new ideas and new cheesemakers to enter the dairy market. In addition, put together a distribution analysis to conceive and construct an infrastructure to consolidate multiple companies’ products for joint freight, cold storage and distribution in key markets within U.S. population centers. Vote: 27-0.
GENERATIONAL SUCCESSION AND TRANSITION SUB-COMMITTEE
Topic: Investments in scholarships, planning support and apprenticeship sponsors.
Problem statement: Money available for producer grants under the Grow Wisconsin Dairy 30X20 program have been directed to the Governor’s Dairy Scholarship program. Both programs have been useful, but the program parameters should allow flexibility for use of farms at differing stages of their careers.
Recommendation: Maintain the Governor’s Dairy Scholarship program with guidelines already in place. Reinstate a portion of the Grow Wisconsin Dairy initiative which provided farmers the opportunity to access funding intended for the use of farm succession and transition planning. Also, provide a financial assistance grant to producers participating in sponsorship of a Registered Apprenticeship Program. Vote: 27-0.
Topic: Reimplementation of the Beginning Farmer and Farm Asset Owner tax credit.
Problem statement: The 2009 Wisconsin Statute 93.53 authorizes a tax credit to support enrollment of the beginning farmer to enroll in a financial management program. The tax credit was terminated in 2013. An eligible farmer can access the credit which is equal to 15 percent of a lease amount received by an established farmer. Chattel may be used for asset valuation but owned land cannot. This is too restrictive for beginning farmers who are purchasing land assets. Further, the $200,000 constraint on individual net worth is too restrictive as an owned dwelling may exceed the limitation.
Recommendation: Reinstate the 2009 Wisconsin Statute 93.53 with changes — include “agricultural land” in the definition of an agricultural asset in Section(1)(a), and increase the restriction of individual net worth from $200,000 to 500,000 in Section(2)(a). Vote: 26-1.
Topic: Need for additional farm business succession facilitators.
Problem statement: As an increasing number of farm businesses approach succession and transition of assets to a younger generation, there are a limited number of facilitators to aid in the process. These farm owners need access to group and individual education and facilitation.
Recommendation: Maintain and coordinate succession facilitators from UW-Center for Dairy Profitability, UW-Extension, DATCP (Farm Center) and Wisconsin technical colleges. This may be accomplished by creating an administrative board that would coordinate statewide activities and serve as a central clearinghouse for program resources and information. Such a centralized board may also seek funding support from USDA, other granting agencies or the recommended Dairy Innovation Hub to hire additional facilitators. Vote: 26-1.
Topic: Review eligibility for Department of Workforce Development services for self-employed individuals.
Problem statement: Self-employed workers who have lost their business, such as farmers, do not meet eligibility requirements under the dislocated worker program. They have not received a “notice of termination or layoff” from an employer.
Recommendation: The state should review the “Workforce Innovation and Opportunity Act (WIOA) Title 1. Eligibility Determination and Documentation, 8.2.2” to alter eligibility to include self-employed individuals. Vote: 26-1.
CONSUMER CONFIDENCE AND PERCEPTION SUB-COMMITTEE
Topic: Encourage young people to pursue ag careers.
Problem statement: Agriculture contributes nearly 500,000 careers to the workforce in Wisconsin, making it one of the state’s single largest employment sectors. Yet rural communities struggle to retain youth in an industry requiring high levels of science, technology and skills to maintain this vital system.
Recommendation: Establish and offer model programs for communities, local businesses and education systems in career path development programs targeting the agriculture career sector. Vote: 27-0.
Topic: Need for a consistent industry message.
Problem statement: There is a need for a cohesive, consistent message about dairy by everyone in the industry to strengthen the positive message through repetition via multiple channels. A broader range of issues also need to be included.
Recommendation: Create a one-page reference sheet with key messages related to different facets of dairy to be distributed to key players, including the governor’s office, farm organizations, universities, etc., to ensure that when we talk about dairy, we all speak with a united voice and send a consistent, positive message to consumers. Creation of the reference sheet would be a multi-organizational effort, using research conducted by Dairy Management Inc. and Dairy Farmers of Wisconsin regarding what dairy-specific topics are most relevant to consumers and the appropriate way to communicate key messages to consumers. Vote: 25-1 (1 abstain).
Topic: Support the National Dairy FARM (Farmers Assuring Responsible Management) Program or equivalent.
Problem statement: The dairy industry, in partnership with dairy farmers, recognizes a collaborative responsibility to ensure the best care is provided to dairy cows, not only because it’s good for business but because it’s the right thing to do. Dairy processors and producers are firmly committed to ethical treatment of dairy cattle and sustained animal wellness on dairy farms.
Recommendation: The task force supports the animal care guidelines outlined in the National Dairy FARM Program and/or an equivalent program and endorses suppliers to enroll and participate in FARM. Any equivalent programs must be science-based and cow-centric. Vote: 25-1 (1 abstain).
Topic: Truth in food labeling.
Problem statement: Thorough and accurate food labels are important tools that help consumers make informed purchase decisions and allow producers to differentiate their products.
Recommendation: Encourage DATCP and the Wisconsin DOJ to do all they can to work with state attorney generals as well as Congress, the FDA and the USDA to implement truth in labeling laws. Encourage DATCP and the Wisconsin DOJ to encourage labeling requirements that better inform consumers about the difference between dairy products and plant-based beverages and products as well as beef products that come from cattle and those that were created in a laboratory. Vote: 27-0.
EDUCATION AND WORKFORCE SUB-COMMITTEE
Topic: Reduce barriers for farmers to utilize services from the DWD’s Division of Vocational Rehabilitation.
Problem statement: The WDVR created a policy in 2016 that significantly reduced the number of farmers with disabilities that WDVR serves. The Existing Business Policy requires farmers/consumers who own an existing business and want assistance from WDVR to provide three prior years of taxes to demonstrate both profitability and that the farmer/business owner earned minimum wage or above for hours worked for each of those three years. Most farmers/small business owners cannot meet this stringent Wisconsin-created policy. The policy has reduced the number of farmers with disabilities WDVR served from 80 to 100 per year to about five per year since 2016.
Recommendation: Retire the current Existing Business policy. Reinstate the Toolkit for Existing Farms and add a fee schedule that would assure the WDVR that the historical $1 million to $1.5 million expenditure for farmers per federal fiscal year would again be the norm. Vote: 26-1.
Topic: Assist rural businesses to pursue healthy workplace practices.
Problem statement: There is a “hidden workforce” in rural Wisconsin of people who want to work but can’t. A survey conducted by the UW Population Health Institute identified transportation to work, access to health insurance and childcare as the most limiting barriers.
Recommendation: Have the state financially assist rural businesses that pursue healthy workplace practices. Access the UWPHI to conduct a study identifying the potential workforce by county across the state. Partially cost offset a) rideshare-type programs to get people to work; b) access to health insurance; c) access to childcare. Stipulate that all funding comes with the requirement that participating businesses must adhere to the principals of the Equal Employment Opportunity Act. In addition, participating businesses must train management and supervisors in the “soft skills” of managing a diverse workforce (that training will be partially funded by the state). Also, help fund social media campaign and/or articles that explain the program to the public, and promote the program and look for additional funding support through the DWD. Vote: 25-2.
Topic: Develop a dairy internship program.
Problem statement: Many students do not perceive agriculture as a career option.
Recommendation: Develop a Dairy Internship Program to attract university and technical college students to production agriculture. The internship program (which will have guidelines) will be offered through universities and technical colleges with agricultural programs across the state. Universities and colleges will assist hosting businesses in outlining a project and creating a list of responsibilities, wages and work schedules. The task force is requesting state funding for this project. Vote: 23-3 (1 abstain).
DAIRY AND RURAL COMMUNITY VITALITY SUB-COMMITTEE
Topic: Need to study the impact of dairy and agriculture on local communities.
Problem statement: Agriculture accounts for 25.75 percent ($88.2 billion) of the state’s economy, and dairy represents about $43.3 billion. Dairy supports one out of 10 jobs in Wisconsin, and the economic impact supports an additional 1.46 jobs. The average cow in Wisconsin generates $34,000 of economic activity every year.
Recommendation: Additional funding should be budgeted for UW to study existing or proposed dairy and agricultural infrastructures in a community, county or broader region, as well as the benefits of the impact that currently exists or the benefits of future impact where new infrastructure is proposed. The goal is to bring economic studies to the awareness of local communities and their local contributions of the dairy and agricultural sector. These models of local contributions can then be used for the creation of tools to identify dairy and agricultural opportunities in the local infrastructure as well as provide a viewpoint of the importance the sector already serves. Vote: 27-0.
Topic: Establishment of ag-based programs at the local level.
Problem statement: The economic impact of the dairy industry on the state’s gross domestic product is not well understood. This literacy should be enhanced and made accessible to local decision makers throughout the state.
Recommendation: Establish and maintain agriculture-based programs with emphasis on dairy in chambers of commerce, extension networks and workforce development programs throughout the state. Programs should build understanding of agriculture’s economic impact, enhance the agriculture infrastructure, educate consumers on farm origination to table destination, promote agriculture career development and improve the vitality of Wisconsin’s rural heritage. Vote: 26-0.
Topic: Solutions for local road infrastructure support and maintenance funds.
Problem statement: Rural communities need access to road infrastructure support and maintenance funds.
Recommendation: Mandate that a set percent of the total transportation budget for the state goes to local roads. Class A trucks used to haul feed and/or manure should be treated the same as milk trucks (heavy truck fee). Support a local wheel tax for towns and/or counties. Look at road bonding through insurance companies or a line of credit. Farms that are large enough to generate substantial heavy vehicle traffic could partner with local towns to help build roads out to a major highway. Dyed fuel tax for farm equipment would go directly to townships, not through the General Transportation Fund. Vote: 14-11 (1 abstain).
Topic: Educational programming for non-farm audiences.
Problem statement: As generations of employees are becoming further removed from the farm, they have little experience with today’s modern farming practices. It is vital to create educational opportunities to be available to Wisconsin businesses to train their employees in today’s modern farming practices.
Recommendation: Include the following in educational programs — basics of a dairy cow and related topics; farming essentials, with a focus on land and crop management; and business management. Also, create grant funding for organizations that devise these educational opportunities. Vote: 26-0.
Topic: Assist farms in developing and marketing agritourism.
Problem statement: Agritourism is important for many small dairies throughout the state. More farms are looking at developing business plans that involve agritourism as a way to diversify their operation.
Recommendation: Draft documents that highlight a step-by-step process for farms to follow that could help standardize and reduce risk for the farms providing on-site tours. Each farm could put its own spin on the tour. Also, have centralized locations (such as a website or farm listing brochures) for farms who want to advertise their agritourism offerings. And assist in getting small, specialty cheese, ice cream, yogurt and fluid milk creameries store exposure. Vote: 25-1.
Topic: Support for broadband Internet services in rural communities.
Problem statement: Options for Internet services in rural areas are extremely limited, and they usually come with data cap restrictions or have very slow service speed. It is important for families living in rural communities to have access to broadband Internet services.
Recommendation: Support legislators to continue investigating the possibility of making this a reality for rural communities. As family farms try to upgrade technology that may make their farms more efficient, there will be an increasing need to utilize broadband. To keep a subset of our population living in rural communities, there must be an efficient way for them to communicate and work with people living in cities. Vote: 26-0.
Topic: Require animal official identification.
Problem statement: The threat of a contagious, zoonotic or foreign animal disease is a risk to livestock on dairy farms. Accountability of individual animals and the ability to trace their movements from a processing facility to farm of origin is important for veterinary teams to contain, isolate and quarantine potentially infected or exposed facilities.
Recommendation: Official animal identification is already required for interstate movement of cattle. The task force recommends any bovine leaving a farm for sale, exhibition or slaughter be identified with official identification. Options include Brucellosis vaccination eartag, 840 AINs or Silver/Brite tags. Vote: 24-1 (1 abstain).
Topic: Encourage dairy producers to run for local offices and commissions.
Problem statement: Urbanization of Wisconsin’s rural communities can mean township boards and planning commissions are filled with members who do not have a farm background or appreciate the complexities of operating a farm business. This can lead to local ordinances that unfairly restrict vehicle movement or practices necessary to farming operations.
Recommendation: Encourage dairy producers to run for local town offices and serve on local plan commissions. Vote: 26-0.
Topic: Become a dairy product and business innovation center.
Problem statement: The Agriculture Improvement Act of 2018 contained language and authorization to establish not less than three dairy product and business innovation initiatives. The effort talks about drawing on existing industry resources such as academic and industry expertise, a dense dairy population, etc. These are all conditions of the resources available for the Wisconsin dairy industry.
Recommendation: With coordination among UW, DATCP, industry associations and others, a proposal should be prepared and submitted to become one of the regionally located dairy product and business innovation centers. Vote: 26-0.
Topic: Need to have and understand a contract/member agreement.
Problem statement: Extra milk supply, trade disputes and policy changes have led to abrupt dismissal of dairy farm markets for milk. Short notices of no longer needing a producer’s milk can have catastrophic consequences for farmers.
Recommendation: Encourage all milk producers and buyers to have a current contract/member agreement with the organization marketing the farm’s milk. It is further encouraged that the producer and buyer understand and communicate: the notice period in which either party can exit, the policies/requirements that either party must meet to be in compliance, and the actions that can be enforced if either party is in breach of the contract/agreement. Vote: 18-8.
Topic: Reduce the number of milk classes from the current four to two.
Problem statement: Pooling of milk values across the four classes renders plants relatively indifferent to giving up milk to the highest and best use of milk and diminishes the overall value of the pool.
Recommendation: Reduce the number of milk classes from the current four to two. Vote: 22-0 (4 abstain).
Topic: Support processors with load consolidation and logistics planning.
Problem statement: Due to its Midwest location, Wisconsin faces logistical obstacles with exporting products via either East or West coast port locations. These are significant challenges with smaller volume products like specialty cheese where help would be need for consolidation of loads into shipping container lots.
Recommendation: Explore the need and funding for cold-storage facilities to aggregate loads to full containers, ready for domestic and international transport. Also, continue collaboration with DOT and other public and private partners to develop a logistics plan to provide more cost-competitive freight/shipping. Vote: 26-0.
Topic: Feasibility study for Wisconsin Cheese Brand and Export Board.
Problem statement: A growing number of Wisconsin dairy companies are becoming interested in exports. It is challenging for some plants to have the resources and expertise to develop relationships with overseas buyers, understand export requirements and have sufficient product on their own for cost-effective shipping and distribution. Also, it is confusing to overseas consumers/buyers to understand all the state’s cheese plants. And there is a lack a single brand identity.
Recommendation: Initiate a feasibility study on the development of a Wisconsin Cheese Brand to be sold internationally, similar to what the Irish Dairy Board did with Kerrygold. In addition, the Wisconsin Export Board could be responsible for logistics, buyer relations, collating loads, etc. It is envisioned that this board would partner with organization like Dairy Farmers of Wisconsin, DATCP, WEDC, USDEC, CDR and have member cheese companies. Vote: 21-3 (1 abstain).
Topic: Create a Cheese Export program at CDR with technical staff support.
Problem statement: Wisconsin cheese companies need technical assistance in developing successful products for exports. CDR has successfully assisted state cheese companies to develop many of the specialty cheese products in the past 30 years, but it currently lacks sufficient resources to support a major initiative to developing export cheeses.
Recommendation: Create a Cheese Export program at CDR, modeled after the successful Specialty Cheese program, and provide funding for the additional technical staff. They would support innovation around developing new cheese varieties and other value-added dairy products, optimizing performance/shelf-life, developing new training programs, participating on overseas trade missions, etc. Vote: 26-0.
Topic: Work to conduct detailed consumer preferences and insight studies.
Problem statement: Wisconsin cheese companies lack information on consumer preferences in key overseas export markets. This makes it challenging for companies to know if they can successfully export current product lines, if they need to adjust them, or if they should develop new products for these markets. Conducting detailed consumer insights and preferences studies is expensive and complex if they had to be performed in multiple overseas market places by individual manufacturers.
Recommendation: CDR should work with USDEC/DATCP to identify key export markets and primary target cheese types. The CDR should then conduct detailed consumer preferences and insights studies in Wisconsin by recruiting students or individuals who have recently arrived from these key export markets. The goal is to develop a database of detailed profiles of what the consumers in these regions want, expect and prefer in their cheeses. That information can be provided to any Wisconsin cheese companies that want to export to that region. Vote: 25-1.
ACCESS TO CAPITAL SUB-COMMITTEE
Topic: Beginning farmer program modernization.
Problem statement: The capital required to enter the dairy industry as either a producer or a processor creates a barrier to entry, preventing the continual evolution of the industry. The large capital requirements to enter result in a higher financial risk profile limiting available options to gain start up financing. While programs exist at both the USDA Farm Service Agency and Wisconsin Housing and Economic Development Authority, each has limitations when it comes to supporting entry.
Recommendation: Have WHEDA and FSA make appropriate changes to their programs eligibility requirements to a) make beginning farmer loan programs available to members of a LLC, LLP or Corporation, if the individual otherwise would meet the beginning farmer definitions, helping the individual to become an owner, through purchase of a portion of the business, rather than hard assets; b) modernize and facilitate a method simplifying shared facility agreements to insure eligibility for beginning farmer loans is not impacted. Also, have WHEDA modernize its loan guarantee programs to include an effective tool to support beginning and start-up dairy manufacturers and processors furthering innovation and market development expanding our world-class specialty cheese and dairy product industry. Vote: 26-0.
Topic: Capital for new and emerging technology.
Problem statement: Clean water and management of nutrients continues to be an area that dairy processors and producers work to improve upon through implementation of new technologies. The challenge is that many times these new and emerging technologies have no or limited track records of performance, resulting in limited collateral value, which in turn impacts the availability of capital/financing available to fund the implementation. Additionally, the implementation represents an added layer of financial risk for the operation, further impacting availability of financing.
Recommendation: Personnel from Investors Community Bank, BMO Harris Bank and Compeer Financial penned a Nutrient Environmental Technology Program proposal that provides for a loan guarantee program and developer grant program, modified by the access to credit committee to include dairy processors as eligible users. The purpose of the program is to encourage the adoption of new nutrient management and odor mitigation technology by reducing financial risk. (This recommendation included a lengthy amount of detailed information). Vote: 25-1.
Topic: Establishment of a Farm Savings Account for farmers.
Problem statement: Milk price volatility has become greater over the past several cycles. In high price years, like 2014, farmers seek to avoid income taxes by investing in productive assets, many of which can be expensed in the income-earning year. These assets can contribute to excess milk production in subsequent years, causing deep and/or prolonged downturns in milk prices.
Recommendation: The Farm Savings Account would allow farmers to save income in good years and use the income in years when farm income is down. Taxes would be deferred on the funds in the FSA until the funds are needed as income or the time limit has been reached for having the funds in the tax-deferred account. Vote: 20-5.
Topic: Support the Access to Better Credit Act.
Problem statement: With current dairy economics farm margins are strained, resulting in additional risk to lending institutions providing credit to dairy producers. This additional risk adds cost to the lending institution, which could result in less willing creditors in the agricultural lending space, or an increase in cost passed on to producers that will further decrease margins for dairy farmers.
Recommendation: The Wisconsin Bankers Association has proposed a bill to address the taxation of interest earned on loans made for primarily agricultural purposes. The Access to Better Credit Act will incentivize greater credit access to farmers. Patterned after a federal bill, this provision will provide an opportunity for increased access to cheaper credit for farmers in an increasing interest rate environment. It also provides parity in the tax code in relation to the treatment of tax on agricultural loans — it treats credit unions, banks in a similar fashion for agricultural loans under $10 million. Specifically, the provision creates an income and franchise tax deduction for the income of a lender derived from a commercial loan of less than $10,000,000 to a person residing or located in this state and made primarily for an agricultural purpose. Vote: 23-3.
REGULATORY CERTAINTY COMMITTEE
Topic: Create an app for dairy producers and associates on major topics.
Problem statement: Dairy producers are often asked by neighbors, their community or the media about topics pertaining to the industry. Accessing pertinent facts and supporting material can be time consuming and difficult. And the message should be audience specific.
Recommendation: Dairy Farmers of Wisconsin would create an app for phones and tablets where timely messaging can be accessed. Producers and associates would use the messaging and data found in the app to enhance the dialogue within their own network. Vote: 25-1.
Topic: Address regulations impacting milk haulers.
Problem statement: The dairy industry relies on efficient milk hauling across its road network to assemble milk from farms to plants and to move liquid ingredients between plants. There are many places where Wisconsin regulations do not align with neighboring states, or the dairy industry is treated differently from other industries operating in the same geography within the state. These regulations should be harmonized.
Recommendation: Currently, the Wisconsin Motor Carrier Safety Regulation-Trans 325.01 definition states: “In this chapter, ‘planting and harvesting season’ means the period of time beginning March 15 through December 15 of each year.” Modify the definition to say Jan. 1 (not March 15) and Dec. 31 (not Dec. 15). Also, in the Wisconsin Department of Transportation–DTSD Condition Sheet for Oversize/Overweight Permits, “fluid milk product” (FMP) is defined by 7 CFR 1000.15 and currently states “… any milk products in fluid or frozen form that are intended to be used as beverages…” Modify that to say “…any milk products from the point of production to another point of production or the first point of processing …” In addition, increase FMP legal weights on Class A highways from 75,000 pounds to 82,500 pounds for vehicles not in combination. This can be accomplished by adding FMP to Wisconsin Statute s348.27(9m) covering Raw Forest and Agricultural Products Weight Limitations. Also, exempt trucks transporting FMP from spring thaw frost laws on Class A highways, which would be similar to the forest products exemptions. In addition, support potential new legislation that would create a new annual permit allowing an increase in weight of CMVs up to 91,000 pounds on six axles on roads up to 15 miles departure off of the state highway system. And require local municipalities, towns and counties to determine safe, efficient routing with businesses transporting products to and from the farms. Vote: 26-0.
Topic: Bulk milk weighers and samplers license reciprocity.
Problem statement: Currently licensed bulk milk weighers and samplers must have licenses in multiple states. This imposes an unnecessary regulatory burden of paperwork on milk haulers moving product across multiple states.
Recommendation: Have Wisconsin recognize and pass occupational licensing reciprocity dealing with agricultural services that would include, but not be limited to, bulk milk weighers and samplers. Vote: 25-0.
Topic: Support for public and private partnerships.
Problem statement: For Wisconsin to remain the leader in milk production and dairy processing, it is essential that industry challenges are addressed on a timely basis and our state’s resources are properly aligned to the problem at hand. Coordinating and advancing disparate interests of our common industry will assure a leading position in the dairy world.
Recommendation: In order to meet this goal, private industry, cooperative networks, educational institutions and government at each level must communicate and work collectively. DATCP could be the lead facilitator to unify and coordinate the parties. Vote: 26-0.
Topic: Need for regulatory certainty and consistency.
Problem statement: Regulation and enforcement of regulations are necessary to protect the natural resources of Wisconsin and the public health while serving the public good. Regulations should be based on sound science and actual issues rather than perceived issues or opinions. Regulations requiring a change of practice often result in a cost of compliance to existing operations. Inconsistent enforcement of regulations between jurisdictions adds confusion and can unfairly add costs where compliance is non-uniformly imposed.
Recommendation: Create a state-level regulatory clearinghouse including membership from all impacted stakeholders to ensure that all new regulations are science-based and to determine the appropriate enforcement agency to insure consistency across jurisdictions when state level consistency is warranted. Also, conduct a financial impact study on each new practice required by a new regulation to ensure financial feasibility for the dairy producer or processor. Where that financial feasibility is limited, a funding source or cost-sharing source must be identified to support the implementation of the new practice. Also, create an environmental and clean water “super fund” at the state level in order to provide support for implementation of all environmental and clean water regulations not found to be financially feasible but viable. Vote: 25-1.
Topic: Remove the annual requirements for the rBST affidavit.
Problem statement: Currently, dairy cooperatives proprietary handlers and milk contractors must obtain a signed and notarized affidavit every 12 months or less from every producer shipping milk identified as rBST-free. Many dairy cooperatives and processors in Wisconsin now require 100 percent rBST-free milk. The requirement to obtain a signature every year adds cost and record-keeping challenges for the industry.
Recommendation: Remove the annual requirement for the rBST affidavit under Administrative Rule ATCP 83.02. Vote: 26-0.
PRICE VOLATILITY AND PROFITABILITY SUB-COMMITTEE
Topic: Increasing milk quality standards.
Problem statement: The current upper legal limit of 750,000 somatic cells (SCC) per milliliter of milk has been in place since 1993. This is a limit that every dairy farm must meet to be able to sell Grade A milk under the Pasteurized Milk Ordinance (PMO). The legal limit for milk in the European Union is currently 400,000 SCC, and dairy products exported from the United States to the EU must meet this more restrictive level of quality. The current actual average SCC in the Upper Midwest is below 200,000 SCC.
Recommendation: Change the PMO to harmonize the U.S. legal SCC level to that of the EU standard of 400,000. This would mean that exporters would not have to individually certify that each farm from which they procure milk meets the lower limit. Vote: 26-0.
Topic: Understanding marketing tools available.
Problem statement: Price volatility and low milk prices through the bottom of the cycles threaten the viability of dairy farmers who are “self-insuring.” Dairy producers need to understand the marketing tools available to them and make choices congruent with their individual business needs.
Recommendation: Have dairy producers work to understand the marketing tools that are available, such as Dairy Revenue Protection, Dairy Margin Coverage, Livestock Gross Margin, cash forward contracts, futures and options, etc. Also, Farm Service Agency personnel, agricultural lenders, insurance providers, UW-Extension agents and marketing specialists should work together to provide learning opportunities for Wisconsin dairy producers to deepen their knowledge of existing and new risk management and marketing tools available. Vote: 26-0.
Topic: Increasing demand for fluid milk consumption in schools.
Problem statement: Fluid milk consumption continues to decline. While the problem is multifaceted, making milk readily available in schools for after-sports consumption and refreshment breaks may bolster current demand for the product and reinforce a life-long pattern of consumption.
Recommendation: Have the Dairy Farmers of Wisconsin, Wisconsin FFA chapters, dairy processors, dairy producers, dairy product distributors, the Wisconsin Association of School Boards and Wisconsin schools work together to put dairy product vending machines in every school in the state (including universities) for students to purchase milk from Wisconsin dairy farms. The state could offer grants to schools or FFA chapters to purchase the vending machines. Also, it’s recommended that Wisconsin processors be eligible for economic development grants or milk checkoff dollars be used to convert or enhance their product lines to be able to produce bottled milk containers for school vending machines. Vote: 26-0.
Topic: Need to understand milk pricing and provide training.
Problem statement: Dairy farmers need to understand how milk is priced to better anticipate price movements and to have input into changes to the Federal Milk Marketing Orders.
Recommendation: Have all dairy farmers develop a general understanding of how Federal Milk Marketing Orders work, and have the UW Center for Dairy Profitability hold seminars to educate farmers on this topic. Vote: 26-0.
Topic: Support H.R. 832, Whole Milk for Healthy Kids Act of 2019.
Problem statement: In 2010, lawmakers passed The Healthy, Hunger Free Kids Act, which mandated all milk served in the National School Lunch Program and School Breakfast Program had to be skim or low-fat, and any flavored milks had to be skim. This was followed by a significant decline of milk consumption in schools — 28 percent in five years. In 2018, Secretary of Agriculture Sonny Purdue allowed skim, 1 percent and 2 percent milk options to again be offered in schools, but whole milk products are still not available.
Recommendation: Support congressional passage of the Whole Milk for Healthy Kids Act of 2019 (H.R. 832), which would allow flexibility of school lunch programs to offer a variety of choice in flavored and unflavored milk, including whole milk. The task force also supports that change in the National Dietary Guidelines. Vote: 26-0.
Topic: Mandatory pooling.
Problem statement: As milk has become long on the Upper Midwest market, manufacturing plants have depooled or partially depooled their milk from the Federal Milk Marketing Order, allowing them to pay less than regulated minimum prices to producers.
Recommendation: Support mandatory pooling of all classes of milk in a Federal Milk Market area. Vote: 9-8 (9 abstain).