But the changes are not coming without a battle. Politicians, environmental advocates and community leaders have tried to block big operations from opening, saying they threaten to alter the picturesque landscape, foul waterways and bring ruin to traditional family farms.
Governor Scott McCallum of Wisconsin insists the plight of the small dairy farmer is really about the complicated government support system that has resulted in lower prices for Wisconsin dairies.
"The real problem," said Lisa Hull, McCallum's press secretary, "is milk prices."
Many, however, say size, and not price, is the more crucial issue, and that political obstacles have simply stalled the development of big dairy operations in Wisconsin, where special permits are required for herds of 1,000 or more.
"We've got people who have this locked-in perception of a farm and they don't want that changed," said Tom Thieding, a spokesman for the Wisconsin Farm Bureau.
"They'll fall over each other to get a Wal-Mart," Thieding said, "but they'll also fall over each other to stop a large dairy operation from coming in."
Cultural question
Part of the problem is that Wisconsin is struggling with questions about culture as much as economics.
"There's not a lot of family involved; it's working and overseeing," said David Schuster, a 43-year-old third-generation dairy producer who milks cows with his father and son on a farm in Marshall, Wisconsin "I can't get past that part. I don't know if I'd make it as management."
Concerned about the emergence of big farms, one entrepreneur decided to experiment by building a 300-cow dairy with a modern milking parlor. He built it to see whether a family of two or three could profitably operate what by Wisconsin's standards is a relatively big dairy farm, he said.
"Is it possible to buck the trend?" said the entrepreneur, John Gehl, who own Gehl's Guernsey Farms, a milk processor in Germantown, Wisconsin. "Is it possible for a father and son to compete against a megafarm?"
Gehl says he invested more than US$1 million in the project because he was frustrated with the pace of change in Wisconsin. But he also does not want to see the demise of the small-family farm.
"Not many think my farm will survive," he said. "But I'd rather have 10,000 farms with 400 cows apiece than 2,000 farms with 2,000 cows apiece."
Most experts agree that Wisconsin will remain a top-tier dairy state as big dairies win greater acceptance here, if only to keep pace with the broader consolidation in the food industry. In April, for example, two of the nation's biggest dairy processors, Suiza Foods Corp and Dean Foods Co, said they would merge to create a coast-to-coast milking mammoth. The question here in the Midwest is whether the move to California-style dairies is happening quickly enough. Indiana, Michigan and Minnesota are asking the same question.
Kegler in Waterloo does not particularly like the size of the new farms. But he says they are inevitable.
"There's a lot of vitriol whenever someone wants to put in a 2,000-cow operation," he said. "But the people here in Wisconsin have to change their mind because the smaller guys are getting too old, and they don't want to milk anymore."
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