In an old red barn amid the green pastures of his dairy farm, Eugene Kegler is milking cows in the late afternoon and wondering whether the sun is about to set on this way of life.
"We don't know for sure," Kegler says, methodically hooking up 70 cows, one by one, to a stainless steel milking machine as his wife, Ruby, and his son Glenn, 36, help with the work. "We'd like to make some changes, but building costs are so high. How can you justify spending half a million dollars just to keep milking cows?"
Kegler, 61, is a second-generation dairy farmer who scrapes by in a region best-known for its rolling meadows and Holstein cows. But milk prices are in a slump these days, and the dairy industry is moving westward, to states like Arizona, California, Idaho and New Mexico, where large-scale agriculture is being adopted more rapidly.
Consolidation is also reshaping the landscape, as large dairy processors seize a greater share of the market. As a result, the little red barn with 50 or so dairy cows is on the way out, and the giant 2,000 to 3,000-cow operation pioneered in the West is replacing it.
Wisconsin, which still has 18,000 dairy farmers, is struggling to keep pace. But as it navigates a complicated path between trying to preserve its small family farms and adopting the more efficient factory-like operations, the state's milk production is stagnating along with that of the entire region.
Seven years after California unseated Wisconsin as the nation's biggest dairy state, Wisconsin is still searching for a way to reignite growth in one of its most important industries. But now California is even vying to replace Wisconsin as the nation's No. 1 cheese producer. California is planning a double-edged approach: branding its cheeses in ways that resemble its success with premium wines and hoping to lure plants eager to churn out tons of mozzarella and other commodity cheeses next to its burgeoning milk operations. The result could be devastating for Wisconsin's US$18 billion dairy industry.
No one expects Wisconsin's dairy industry to disappear overnight. But the state's reluctance to speedily adopt big-scale dairy farms to bolster growth and offset the annual loss of scores of small farmers could be aiding the westward expansion of the cheese and dairy industry, agriculture experts say.
To retain a strong cheese industry, Wisconsin needs to produce more milk; 85 percent of the state's milk is used to make cheese. But uncertainty about the state's outlook is one reason that Land O'Lakes, one of the nation's biggest dairy producers, recently abandoned plans to build a US$200 million cheese plant in Wisconsin. The company is building in California instead. So how serious is the issue here?
"It is approaching a crisis stage," said John Umhoefer, executive director of the Wisconsin Cheese Makers Association. "Milk production has been flat for a decade. But we need more milk in Wisconsin to satisfy the cheese industry."
Fewer farmers, less milk
The problems have a kind of ripple effect, dairy experts say. Fewer farmers means falling milk production; and less milk means higher prices for cheese producers, which forces them to head west, where the price of raw milk is lower.
"It's just part of the problem of the industrialization of agriculture," said Todd J. Duvick, a food analyst at Bank of America. "States in the Midwest have laws against corporate agriculture. There's a mentality of preserving the family farm. But in the process they're losing an entire industry."
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