WCMA Notes: Innovation is Key to Dairy Growth

Volatile international markets, a critical labor shortage, and ever-shifting consumer trends have created a challenging environment for U.S. dairy processors eager for growth.

The plight of our partners in industry is, perhaps, more dire.  Five years of low milk prices led nearly 3,000 U.S. dairy farms to fold in 2018.  In just the first half of this year, in Wisconsin alone, 449 dairy farms were lost.

Economists, politicians, investors, optimists and pessimists alike try to predict when the tide will turn for U.S. dairy, but only time will tell.

We can be far more certain of the catalyst for greater profitability and progress: innovation.

In September, the Center for Dairy Research (CDR) and Wisconsin Cheese Makers Association (WCMA) were awarded a U.S. Department of Agriculture grant worth more than $450,000 to launch the Dairy Business Innovation Alliance, one of three initiatives across the country designed to support industry entrepreneurship, investment, and development.  Vermont and Tennessee will host the other projects.

U.S. Senator Tammy Baldwin of Wisconsin authored the Dairy Business Innovation Act and fought hard to see it approved in the 2018 Farm Bill.  She’s going to bat for it again via a new appropriations bill, which could hold up to $20 million for the three initiatives in 2020.

CDR and WCMA will use half of funds awarded to support low- or no-cost workshops and direct technical assistance for dairy farmers, manufacturers, processors, and marketers.  The other half will be redistributed throughout Illinois, Iowa, Minnesota, South Dakota, and Wisconsin in small, direct-to-business grants.

This week, the Wisconsin Joint Finance Committee approved nearly $9 million in funding for the creation of a new Dairy Innovation Hub.  This program will support the University of Wisconsin System in attracting world-class dairy researchers, tasked with discovering new value-added products and farming techniques focused on efficiency and sustainability.  Monies will also support new educational opportunities for our industry at UW-Madison, UW-Platteville, and UW-River Falls.

We thank Wisconsin Senator Howard Marklein, Representative Travis Tranel, a bipartisan coalition of lawmakers, Governor Tony Evers, and a powerhouse team of ag advocacy groups for helping to bring the Hub to life.

With both the Dairy Business Innovation Alliance and Dairy Innovation Hub on the immediate horizon, we look forward with hope.

A little know-how and a bit of seed money can go a long way.

Consider Paul and David Scharfman of Specialty Cheese Company.  In 2018, they cracked the code to successful marketing of their baked cheese snack, Just the Cheese, on Amazon.com, leading to a sales boost of more than $3.5 million.

Chris Renard of Renard’s Cheese recently added smaller-size wheels of cheese to his array of specialty offerings to appeal to foodies hungry for variety, and they’re a hit.

Looking to add value to their operations, Hoard’s Dairyman Farm unveiled a creamery line of Port Salut- and Camembert-style cheeses in 2018, to much excitement not only for consumers, but also for the cheesemakers with whom Hoard’s works.  Earlier this year, after more than a century in the Limburger and Swiss business, Chalet Cheese Cooperative developed and launched a brand-new cheese called Le’Bec.

This past year, Ponderosa Dairy Products beefed up its marketing team and invested in brand advertising.  It also adjusted packaging to increase product shelf life by 50 percent.  Combined, these changes led to increased distribution, and a 15 percent increase in sales volume.

From product development to savvy marketing campaigns, all sorts of innovation offer dairy processors and their farmer partners opportunity for growth.

The industry’s enthusiasm for progress and responsiveness to change, paired with the financial and educational support promised through the Dairy Business Innovation Alliance, its sister projects, and Wisconsin’s Dairy Innovation Hub, is reason to expect a new and more prosperous chapter for the U.S. dairy industry ahead.

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