Thankfully, “New Nafta” Has Saved Wisconsin Dairy!

Ooops. Jumped the gun. Actually Nafta 0.8 will only yield minor benefit to American dairy farmers. In the meanwhile, prices are plummeting…

Figure 1: November 2018 milk futures. Pink dashed line at Nafta deadline/agreement. Source:

From Dairy Herd Management (August):

Another 382 dairy farms have left the business in Wisconsin this year through the first seven months of the year. That’s an attrition rate of 4.3%, and there are still five months to go.

The negative impact is hitting all sorts of farms. From Wisconsin State Journal:

Unlike past years, when just the smallest farms, with herds of 50 or fewer cows, were closing, some big farms with herds of more than 300 cows are also succumbing to the pressures of building debt with little equity, Basse said. “It all depends upon how many years you can endure negative margins,” he said.

Recalling that Wisconsin is cheese exporter, can one find succor by looking at cheese prices? No…

Figure 1: November 2018 cheese futures. Pink dashed line at Nafta deadline/agreement. Source:

16 thoughts on “Thankfully, “New Nafta” Has Saved Wisconsin Dairy!

  1. Moses Herzog

    Sometimes I will admit to having a sadistic streak in me, certainly as it relates to people who take pride in their own ignorance, or have 4th grade reading level and cannot even be bothered to read a respected city newspaper, much less make a half attempt to broaden their own lexicon. Yes friends, sometimes I “revel” in their pain. I “enjoy” it. Now my question is, how many of the 382 former dairy farmers now out of business, just within the last 2 years cast a vote for donald “the great inheritor” trump?? Can we make an educated guess more than 3 of every 4 voted for the bastard???

    A post card from Uncle Moses to the shortsighted and small-minded former dairy farmers:

    “Dear poor no longer dairy farmers: Enjoy the bed YOU made for yourself—sit in it and wallow in it, and do your best to ignore the funk of your own urine saturated sheets (God knows your hero trump would enjoy them). Love, Moses”

    1. Paul Mathis

      I don’t think they love Trump now. But they still hate us and that drives their “thinking”.
      The liberal, educated elite who don’t work in the mud everyday are just contemptible to them.
      They will go to their graves hating us and nothing will change that.

      1. baffling

        much of the thought process regarding how the liberal coastal elites should learn from the working class and farmers bears a striking similarity to the cultural revolution and Up to the Mountains and Down to the Countryside Movement of 60’s and 70’s china. that movement set china back a couple of decades. our tea baggers could do similar harm here in the states.

        1. Paul Mathis

          Good point. I hadn’t thought of China’s Cultural Revolution, but that is what we have now in Trumpland.

          The re-education camps will be next

          Vote Nov. 6.

  2. pgl

    “With U.S. milk prices in the fourth year of a slump due to chronic oversupply, Fritsche, 58, is unsure whether he will be able to pass his 30-cow farm onto his sons and grandsons.”

    A prolonged period of excess supply and Trump thinks minor changes is going to change that??? Well – Fritsche will not have to worry about that pesky estate tax!

  3. baffling

    the problem with wisconsin and other dairy states, is simply an oversupply of milk. period. what we have is a market failing to correct itself. prices are low because supply is high. basic economics. the entire canadian market will not fix this-wisconsin produces more milk itself than canada as a nation consumes! the real question-and i don’t know the answer-is what has led to this oversupply of milk in the us? why are we producing too much? is it tax and business policy that has distorted the market so dramatically? why do dairy farmers continue to oversupply through a four plus year price fall?

    1. Paul Mathis

      The government subsidizes milk production to keep small family farms in business.

      However, big corporate milk producers in California also get those subsidies and they are making profits on higher volumes. The small farmers simply can’t produce enough to make a profit. Same situation as Walmart wiping out small retailers everywhere it goes.

      1. baffling

        so why should canada open up its dairy markets to free trade with a country that subsidizes that market? and why aren’t the conservatives, republicans and libertarians up in arms about these government subsidies?

  4. Julian Silk

    Dear Menzie,

    I am going to cite all this as graduate training for agricultural economics in applying to USDA jobs….


  5. baffling

    to all the nut jobs on this blog who immediately peddled conspiracy theories on how the mail bombs were a democratic ploy to disrupt the midterms
    a registered republican with pro trump posters and “right-wing paraphernalia” was arrested in connection with the bombs. you are all hacks who have lost your respect for democracy and truth in favor of win at all costs mentality. pathetic.

    1. pgl

      Check out the stickers on his van. Very pro Trump and pro Pence. He had a Facebook account called Kill George Soros.

    2. pgl

      “Sayoc, a registered Republican voter who lives in Aventura, Florida, will face federal criminal charges for the mailed devices, according to NBC News. The Brooklyn, New York, native, previously was arrested, in Florida in 2002, on a charge of threatening to throw a bomb.”

      Oh Lord – this creep is a native of my Brooklyn?!

  6. pgl

    Press coverage featuring first the Attorney General (who said some really important things), the director of the FBI (excellent job), the Commissioner of the New York City Police Department, and now a prosecutor for the Southern District of New York. The clown is going to be tried in New York City where we get the job done.

  7. joseph

    Paul Mathis: “The government subsidizes milk production to keep small family farms in business.”

    Assumes facts not in evidence. It is much more likely that the government subsidizes milk production because of large corporate farmers who can afford lobbyists and donations to congressmen and dominate state politics.

    More than half of all milk is produced by large operations of 1000 or more cows. Only 15% of milk is produced by small farmers with less than 100 cows.

  8. Barkley Rosser

    A story from my grad school days at Wisconsin. Bob Haveman had just come to the dept after working for Wis. Sen. William Proxmire (D), who chaired the Joint Economic Committee and regularly handed out “golden fleece” awards for various programs he considered to be wasteful boondoggles. In the spring of 1972, he very briefly contemplated running for president, although he never actually did so. But in that brief moment of thinking about it, the Prox came to the UW econ dept and gave talk on the 8th floor with Lake Mendota. Haveman, with visions of being Treasury Sec or whatever made sure we all showed up. The Prox gave us his standard speech about opposing special interests and waste and all that. At the end, then Prof. Lau Christensen asked him, “Sen. Proxmire, if you are so opposed to special interests, why do you support dairy import quotas and price supports?” To that the Prox smiled and replied, “Well, after all, I am the senior senator from the state of Wisconsin.”

    1. 2slugbaits

      Barkley Rosser Here’s another Wisconsin politician story. Recall that Rep. Les Aspin was always a big critic of wasteful Pentagon spending. A long time ago a colleague and I were working on an economic model to help procurement analysts for the Army determine whether or not it made economic sense to cutback “obligated” (i.e., already on contract) procurement actions. The model included production functions that were supposed to tell the analyst how much the contractor had actually sunk into production at some point in time. Anyway, during testing we needed some real world data to test and calibrate the production functions. It so happened that the first contract (randomly selected) we wanted to test was with a contractor who happened to be in Rep. Les Aspin’s district. Now there was never any intent to actually cutback procurement against this contract. We only wanted some “as if” data for purposes of testing the calculations and assumptions in the economic model. Within a day we got a call from the Congressional liaison office in the Pentagon directing us to stop immediately and that there would be no cutting back on that contract. Efforts to explain that this was ONLY a test and there was no plan to cutback were fruitless. We later found out that the contractor immediately called Aspin’s office as soon as we started asking about contract termination costs, and Aspin’s office just as quickly contacted the Pentagon’s liaison office.

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