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Ettrick family struggles to grow their herd amid the dairy crisis
Elizabeth Beyer, La Crosse Tribune 

Cows stand in a free stall on Wegnerlann Dairy. 

Wegnerlann Dairy Farm LLC, increased its herd from 500 cows to 800 in 2016, before the market turned.

At the time, farm owners Jeff and Betty Wegner of rural Ettrick decided to add to their herd because they wanted their son, Tom Wegner, to have the opportunity to make a good living as a dairy farmer.

“That’s why many family farms decide to expand, because they want all family members to have a role,” said Annaliese Wegner, a fifth-generation farmer and Tom’s wife. “If you just had 100 cows, it might be hard to provide an income for every family member.”

“At the time [milk] prices were looking really good,” Tom said. The farm took out loans to purchase the new additions to their herd, but when it came time to pay the bank back, milk prices started to plummet, and their business began to feel the impact of the market fluctuation.

“It’s hard to make a profit,” Annaliese said.

Elizabeth Beyer, La Crosse Tribune 

A young calf eats grain while in its pen on the Wegnerlann Dairy farm. 

Wegnerlann Dairy LLC produces conventional milk, which is shipped through Dairy Farmers of America and bottled and sold to Kemps in Rochester and surrounding towns.

Sales of conventional milk dropped 4.5% nationwide in March, compared to 2018, while milk production increased 0.4% in Wisconsin when compared to the previous year, according to USDA reports.

“You have to make cuts where you can, when you can,” Tom said. The farm had to put off repairs and the purchase of new equipment.

“We’re just getting by, really. Trying to do the best we can with what we have and wait for the milk price to go back up,” Annaliese said.

In 2018, Wegner Dairy Farms collected close to $50,000 through USDA subsidy programs.

Elizabeth Beyer, La Crosse Tribune  

A cow stands in a free stall barn at Wegnerlann Dairy farm.

Of that, $30,000 was from the Margin Protection Program for dairy, which is meant to support producers when the difference between the milk price and the feed cost falls below a certain dollar amount selected by the producer, according to the USDA. The remaining $20,000 the farm received was from the Market Facilitation Program, implemented to help agriculture and dairy producers who were impacted by the 2018 trade war between the U.S. and China.

Regardless, the subsidy programs have had minimal impact on the industry, Tom said.

“I think the general public sees the [total amount paid out to subsidy recipients] as ‘wow, farmers are getting all these millions of dollars from the government to keep themselves going’ but really we’re not, divided amongst us all it doesn’t add up to much,” he said.

Tom’s parents, Jeff and Betty Wegner, built their business in 1986 in a shallow valley. Tom, a second-generation farmer, and Annaliese, who was raised on a dairy farm in Baldwin, began working Wegnerlann in 2011 after they graduated from UW-River Falls with degrees in dairy science.

Today, Wegnerlann Dairy can milk 16 cows at one time, with the help of new technology, and each of the 800 cows is milked three times a day.

Nine full-time employees work and live on the farm in addition to the four members of the family and one part-time employee. It takes roughly eight hours to milk the entire herd. The Wegners get feed for the cows from a custom harvester as their land is dedicated to maintaining and raising the herd.

Calves are born on the Wegner farm, and once they’re weened at 8 weeks, they’re assigned to a pen where they eat grain and drink water until they reach a certain age. The family works in partnership with a custom heifer raiser who cares for the calves at a separate facility not owned by the dairy, where they mature in a pasture.

“It’s just another way to make things easier on us,” Annaliese said.

“Less labor for us, less land-based need for a herd, less feed you need to have on hand,” Tom said.

Despite market setbacks, Tom is confident the price of milk will go back up. “It has to” he said, and sees evidence of a price increase to take place during the second half of 2019.

Annaliese and Tom attribute that possible market price increase to a decrease in milk supply due to area dairy farmers who were forced to sell off their herd and abandon the dairy business after experiencing income loss year over year.

“Many dairies have sold or quit milking cows in the state of Wisconsin last year, so there’s less milk on the market and that’s helped increase the price a little bit,” Tom said.


China retaliates on tariffs, stock markets go into a slide

BEIJING — Sending Wall Street into a slide, China announced higher tariffs Monday on $60 billion worth of American goods in retaliation for President Donald Trump’s latest penalties on Chinese products.

Duties of 5% to 25% will take effect on June 1 on about 5,200 American products, including batteries, spinach and coffee, China’s Finance Ministry said.

With investors worried about the potential economic damage on all sides from the escalating trade war, the Dow Jones Industrial Average fell 617 points, or 2.4%, and the technology-heavy Nasdaq plunged 270 points, or 3.4%, its biggest drop of the year. Earlier, stocks fell in Europe and Asia.

“We appear to be in a slow-motion train wreck, with both sides sticking to their positions,” said William Reinsch, a trade analyst at the Center for Strategic and International Studies and a former U.S. trade official. “As is often the case, however, the losers will not be the negotiators or presidents, but the people.”

Beijing’s move came after the U.S. raised duties Friday on $200 billion of Chinese imports to 25%, up from 10%. In doing so, American officials accused China of backtracking on commitments it made in earlier negotiations. The same day, trade talks between the two countries broke up without an agreement.

On Twitter, Trump warned Xi that China “will be hurt very badly” if it doesn’t agree to a trade deal. Trump tweeted that Beijing “had a great deal, almost completed, & you backed out!”

The rising trade hostilities could damage the economies of both countries. The tariff increases already in place have disrupted trade in such American products as soybeans and medical equipment and sent shockwaves through other Asian economies that supply Chinese factories.

Still, the two countries have given themselves something of an escape hatch: The higher Chinese tariffs don’t kick in for 2½ weeks. The U.S. increases apply to Chinese goods shipped since Friday, and those shipments will take about three weeks to arrive at U.S. seaports and become subject to the higher charges.

Also, both countries have indicated more talks are likely. Top White House economic adviser Larry Kudlow said on Sunday that China has invited U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin to Beijing. But nothing has been scheduled. And Trump said Monday that he expects to meet Chinese President Xi Jinping in late June at the G-20 summit in Osaka, Japan.

The president has repeatedly insisted that increased tariffs on Chinese goods don’t hurt American consumers. But Kudlow, head of the president’s National Economic Council, acknowledged over the weekend that U.S. consumers and businesses will bear some of the costs.

“Both sides will pay,” he told Fox News.

In the U.S., prices of soybeans, targeted by Chinese tariffs last year, fell Monday to a 10-year low on fears of a protracted trade war.

In a statement, American Soybean Association President Davie Stevens, a soybean farmer from Clinton, Kentucky, expressed frustration that “the U.S. has been at the table with China 11 times now and still has not closed the deal. What that means for soybean growers is that we’re losing. Losing a valuable market, losing stable pricing, losing an opportunity to support our families and our communities.”

Trump told reporters Monday that a new program to relieve U.S. farmers’ pain is “being devised right now” and predicted that they will be “very happy.” The administration last year handed farmers aid worth $11 billion to offset losses from trade conflicts.

The president’s allies in Congress scrambled to limit the damage to farm country.

Republican Sen. Chuck Grassley of Iowa said it is time for U.S. allies to “get in the game” to push China to the negotiating table. “China needs to get with it,” he said. “You can’t move these goalposts like they’re moving them and expect to be respected.”

The highest tariffs announced by China will apply to industrial chemicals, electronic equipment, precision machinery and hundreds of food products.

Beijing is running out of U.S. imports to penalize because of the lopsided trade balance between the world’s two largest economies. Chinese regulators have instead targeted American companies in China by slowing down the clearing of shipments through customs and the processing of business licenses.

Oxford Economics calculated that the higher tariffs will reduce the U.S. economy by 0.3% in 2020, a loss of $490 per American household.

Similarly, forecasters have warned that the U.S. tariff increases could set back a Chinese recovery that had appeared to be gaining traction. Growth in the world’s second-largest economy during the January-through-March period held steady at 6.4% compared with a year earlier, supported by higher government spending and bank lending.

The tensions “raise fresh doubts about this recovery path,” Morgan Stanley economists said.

The latest U.S. duties could knock 0.5 percentage points off annual Chinese economic growth, and that could widen to 1 percentage point if both sides extend penalties to all of each other’s exports, economists say. That would pull annual growth below 6%, raising the risk of politically dangerous job losses.

China’s state media tried to reassure businesses and consumers that the ruling Communist Party has the means to respond.

“There is nothing to be afraid of,” said the party newspaper People’s Daily. “The U.S.-instigated trade war against China is just a hurdle in China’s development process. It is no big deal.”

Trump has threatened to extend tariffs to the remaining $300 billion or so in Chinese tariffs that haven’t been targeted yet, but told reporters Monday: “I have not made that decision yet.”

The president started raising tariffs last July over complaints China steals or pressures foreign companies to hand over technology and unfairly subsidizes Chinese businesses that are striving to become global leaders in robotics and other technology.

A stumbling block has been U.S. insistence on an enforcement mechanism with penalties to ensure Beijing carries out its commitments.

“We appear to be in a slow-motion train wreck, with both sides sticking to their positions. As is often the case, however, the losers will not be the negotiators or presidents, but the people.” William Reinsch, trade analyst and former U.S. trade official

ColtenB / Nate Beier, Special to the Tribune 

Holmen's Carson Brock tees off Monday on the 15th hole at Viroqua Hills Golf Course during the MVC championship meet. The Vikings won their second straight conference title.


Local
Brad Pfaff remains optimistic about Wisconsin's ag economy

Despite low milk prices, supply issues and trade disputes with China and Mexico, Brad Pfaff, secretary-designee for the Wisconsin Department of Agriculture, Trade and Consumer Protection, is optimistic about the future of agriculture in Wisconsin.

Pfaff

“I want to set the table by saying this: Agriculture in this state is an economic powerhouse,” Pfaff said Monday to a room full of local business leaders. They were there for a La Crosse Area Chamber of Commerce special forum on the state of agriculture, held at at the Black River Community Center.

Pfaff, who comes from a farming family and grew up in La Crosse County, began working as DATCP secretary five months ago. He was deputy chief of staff to U.S. Rep. Ron Kind before being appointed to the position by Gov. Tony Evers. He also worked at the U.S. Department of Agriculture as the national deputy administrator for the Farm Service Agency during the Obama administration.

Wisconsin agriculture contributes $88 billion each year to the state’s economy, of which almost half is from dairy, according to DATCP data. About one in nine jobs in the state are agriculture-related.

“No other state has such an advanced agriculture economy as what we have,” Pfaff said. “I ask you today to continue to believe and to continue to invest because there are tremendous opportunities available in agriculture.”

While federal officials and dairy groups debate supply management and retaliatory tariffs on dairy in President Trump’s trade war with China drag on, Pfaff said he doesn’t think Wisconsin needs to look to outside help to grow the agricultural sector.

“I think we can do it internally,” he said.

One way is to better market Wisconsin-brand dairy products locally, nationally and internationally — especially when it comes to value-added products, Pfaff said.

Wisconsin produces more than 30 billion pounds of milk, 90% of which is made into 650 kinds of cheese. About 25% percent of that cheese is artisan cheese that can command a higher price and “provide greater value back to the farmer,” Pfaff said.

And the made-in-Wisconsin label carries weight, Pfaff said, adding that he had just came back from a trip to Mexico where the Holstein cows’ genetics and the milking equipment he saw could be traced back to America’s Dairyland.

However, Pfaff acknowledged that “we can’t value-add every product,” which is why the industry should look toward dairy research and innovation, he said.

Consumer trends show that people don’t drink as much milk as they used to, Pfaff said. However, milk can be enhanced with other components or altered to be lactose-free, opening up greater markets in places like southeast Asia, he said.

Pfaff then asked agriculture-adjacent businesses to continue to invest in farmers and rural communities, whether through investments in high-speed Internet, health care or access to agricultural loans.

Wisconsin is unique for the large number of small towns that dot its landscape compared to other midwestern states, Pfaff said. “We in the state need these rural communities. What do small towns supported by agriculture need to continue?”

The governor has been trying to address some of these issues, for example, by requesting $78 million in the state budget for broadband and seeking $1.6 billion in additional health-care spending statewide, including $324 million in Medicaid expansion, Pfaff said.

Evers sent a letter Monday to U.S. Department of Agriculture head Sonny Perdue as part of a ReConnect Program application for loans and grants to install broadband in rural America.