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Canada trade dispute puts some Minnesota dairy farmers on the brink

The executive director of the Minnesota Milk Producers Association says an extreme supply and demand situation has put at least eight Minnesota dairy farmers on the brink of going out of business.

Lucas Sjostrum tells Brownfield ultra-filtered milk duties recently imposed by Canada have left dozens of U.S. producers scrambling to find other destinations for their milk.

“Had this happened any other time, these farmers probably would have found another market immediately and continued on.  But we are so full in processing capacity in Minnesota, the Upper Midwest, and really nationwide, that there is just literally no physical place to take this milk without doing a great harm to everybody else along the way.”

Because of changes to the Canadian pricing system, Grassland Dairy (of Greenwood, Wisconsin) lost a major customer and decided to end agreements with more than 70 producers in Wisconsin, Minnesota, and New York.

Sjostrum says it’s difficult to pinpoint the exact number of affected dairy farmers.

“The situation we’re at right now is pretty dire for at least about eight dairy farmers that are intending to stay in business in Minnesota.  Nobody’s really sure if the original number was 10 or 19 due to privacy laws, but I’ve been using 19 just to be safe.  But we think there’s about eight that are still looking for a market, and we know that there’s two that got picked up.”

Departments of Agriculture in Minnesota and Wisconsin are exploring potential solutions, which Sjostrum says include incentivizing dairy farmers nearing retirement to exit the industry now.

He adds insufficient processing capacity has failed to keep up with an increasing milk supply, saying if there was 10 percent more room this scenario would not have occurred.