April 18, 2019

Northwest FCS News

The 27th annual Professional Dairy Producers’ Business Conference in Madison, Wisconsin, was attended by over 1,200 producers, dairy industry service providers and other professionals. This conference is special to me because I was selected to be the “kick-off” speaker when the conference began over 27 years ago in Wisconsin Rapids with just 38 individuals in attendance. It is great to see how the conference has evolved as a headliner for the dairy industry over the years.

The dairy industry is in the midst of a four-year downturn that has challenged the best producers in the business. During informal conversations in the hallway, the number-one question was, “When are milk prices going to increase?” Based on information from various sessions, the milk price will likely remain at less than stellar levels until supply and demand imbalances are corrected.

The dairy industry is dependent upon export markets returning to previous levels. The alignment of milk products to the younger customer base consisting of millennials, Generation Z and Generation A is also critical. Some attendees at the conference indicated that the dairy leaders have missed the boat on product packaging and delivery of services compared to other beverages, which has reduced consumption. The non-milk alternatives were a common point of discussion among participants.

It was interesting to note some dairymen mentioned that despite low milk prices, they made profits in recent years. These comments came from smaller producers with less than 100 cows and from larger dairy operations.

My visits with agricultural lenders found that refinancing operating losses onto term debt was prevalent for the continuation of operations. The practice of discounting values of machinery, livestock and even land used for collateral was a discussion point in some of the sessions.

Some dairy producers are finding methods to reduce costs such as the use of manure to reduce commercial fertilizer expenses. Quite a few dairy producers are using a team of advisors, such as a crop or livestock consultant or their lender, who periodically meet to provide input.

It was interesting to note the number of participants from outside the U.S. in several sessions. These individuals provided an international flavor of networking. The European producers in the crowd were still expanding their operations even after giving up their quotas; this was a surprise to many U.S. participants.

A positive insight from the conference was the investment many organizations were making in youth-oriented sessions. These educational topics ranged from leadership, ethics and communication to business planning.

I would like to give a shout out to this program and educational venue. When the information is presented, the participants are not only informed, but are motivated to act and network with lifelong attendees from around the globe.