Dairy farming in Wisconsin is not just iconic – it is also one of the key pieces of America’s food security infrastructure.  But as 2024 draws to a close, a storm is brewing on the horizon: the Farm Bill is about to expire, which could push the state’s dairy industry towards a precarious edge, commonly referred to as the “dairy cliff.”

The Farm Bill: A Cornerstone of Stability for the Dairy Industry

The Farm Bill was initially created during the Great Depression, and ever since, it has served as a vital lifeline for America’s agricultural sector. This omnibus bill affects every stage of the USA’s food chain, from commodity programs, trade, farm credits, agricultural research, and marketing.

The bill's provisions for Wisconsin’s dairy industry have been instrumental in maintaining stability and sustainability. Meanwhile, the farmers have repaid the favor by helping generate approximately $45 billion yearly and creating over 150,000 jobs.

Typically, Congress passes a slightly different version of the farm bill every five or six years, changing specific programs depending on the nation’s needs. One of the bill’s most impactful provisions for dairy farming is the Dairy Margin Coverage (DMC), which helps dairy producers stay afloat whenever milk prices fall or feed prices go up. It protects dairy farmer’s profit margins and keeps dairy products affordable for consumers.

The Approaching Crisis

The current Farm Bill was set to expire in November 2023, although Congress approved an exceptional one-year extension. In November 2024, however, the bill and its protections will be officially “dead,” which may trigger a cascade of consequences that may eventually ripple through Wisconsin’s entire dairy sector.

Many industry experts predict an immediate increase in all milk market prices by ceasing payments when profit margins are low. However, the immediate windfall of money for farmers will quickly give way to a sharp contraction in the market. With a volatile market and unpredictable weather patterns, dairy farmers may find preparing for any upcoming adjustments more difficult.

What would this create? In the short to mid-term, a radical surge in operational costs and interest rates. In turn, this may leave smaller family farms unable to secure loans after a bad season or to pay their employees – and may even push them to sell their cattle or land to larger corporations.

For the long term, the disappearance of the Farm Bill’s protections may mean bankruptcy for small farms – and a more consolidated, pricey milk market for the regular American household. The face of rural Wisconsin may change forever, and consumers will be further pushed to cheaper alternatives.

The Path Forward

Congress must act decisively to prevent this impending crisis. While passing a comprehensive new Farm Bill would be ideal, at minimum, an extension of the current legislation is crucial to prevent disruption in the dairy sector. Any new legislation should also address emerging challenges, including climate resilience, modernization needs, and the growing pressure from international competition.

Farming associations are already doing their part and mobilizing to advocate for quick legislative action. The Wisconsin Farmers Union has already organized a national fly-in in September, while the Wisconsin Farm Bureau has launched a series of “learning sessions” on the topic. But miles away from Washington, D.C., they need every available voice to join in.

What Should the American Public Do?

The stability of Wisconsin's dairy industry affects everyone, from the families who depend on farming for their livelihood to consumers who rely on affordable, high-quality dairy products. The threat of the dairy cliff represents more than just an agricultural crisis—it's a potential turning point for Wisconsin's economy, culture, and communities. The decisions made in Washington in the coming months will reverberate through dairy farms, rural communities, and grocery stores across the state.

The time for congressional action is now. Wisconsin's dairy industry has weathered many storms throughout its history. Still, without the vital protections provided by the Farm Bill, this could be the challenge that breaks the back of family farming in America's Dairyland. Let's ensure that future generations can continue Wisconsin's proud dairy farming tradition by supporting the timely renewal of this crucial legislation. The cost of inaction, on the other hand, is simply too high.