The dismal outlook for Wisconsin dairy farmers has worsened as they’re being warned that milk prices will continue falling, and more milk dumping could be necessary, if the federal government doesn’t start buying dairy products to offset COVID-19’s effect on the economy.

Rapidly changing conditions have taken a toll on processors and farmers alike as the market for cheese, butter and other products has been decimated by the near collapse of the food-service industry.

On Friday, cooperatives were telling members to cut milk production through culling cows or other means because processing plants had nowhere for the milk to go.

“It’s just unreal. If you had told me six months ago this was the scenario I would have said you’ve been watching too many horror films. But it’s just been a cascading effect,” said Paul Bauer, CEO of Ellsworth Cooperative Creamery in Ellsworth and a board member of the state Department of Agriculture Trade and Consumer Protection since 2017.

“This week we had one company break their written contract to take eight loads of milk per day, causing a backlog at the cooperative’s plants. We may need to dump milk if our supply is not reduced,” Bauer said.

“Everything is changing so fast. Sometimes it changes by the hour,” he added.

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The federal Coronavirus Aid, Relief and Economic Security Act directed $9.5 billion to a dedicated disaster relief fund for agriculture, $25 billion for the Supplemental Nutrition Assistance Program, $14 billion to the Commodity Credit Corp. program and $450 million to support food banks.

Seven of Wisconsin’s largest farm groups have asked the U.S. Department of Agriculture to use its extensive purchasing power, and the emergency COVID-19 money, to buy dry milk, butter and cheese that normally would be going to restaurants and the food-service industry.

As of Friday afternoon, the USDA had not responded to the pleas of dairy farmer groups desperate for answers as milk prices plummeted to some of the lowest levels since about the 1980s.

“I cannot believe the tone deafness of the USDA to the plight of a perishable product like milk,” Bauer said.

“The government hasn’t bought an ounce of cheese yet. It would be nice to have $9.5 billion in your back pocket and do nothing with it,” he added.

This week, some of the state’s largest dairy farms began dumping milk into their manure lagoons as processing plants, full to the brim, couldn’t accept it.

It’s heartbreaking to watch this, said dairy farmer Ryan Elbe from West Bend, whose family’s Golden E Dairy is disposing of 25,000 gallons a day.

It’s still unknown how widespread milk dumping is in Wisconsin or for how long it will take place. Golden E says it expects to continue dumping through Monday.

But with warnings that dumped farm milk could pollute streams, resulting in fish kills, state officials have posted rules for farmers forced to dispose of their product.

In an “emergency disposal of milk for dairy farms” memo, the agriculture department and Department of Natural Resources say raw, unpasteurized milk is considered to be process wastewater. If the dumping is not done correctly, wasted milk could get into public waterways, reducing the oxygen content and killing aquatic life.

“Care must be taken to apply milk to fields that have the lowest risk of groundwater or surface-water contamination,” the memo says.

“Milk may have a very strong odor as it decomposes, so apply to fields farthest from neighbors if possible."

The Department of Natural Resources may give large livestock farms, known as Concentrated Animal Feeding Operations, flexibility to quickly change their fertilizer plans during the COVID-19 emergency, including reducing the number of days required for public comment on adding fields where milk would be spread. Decisions would be made on a case-by-case basis.

Farmers have been urged to maintain records and report to the state agriculture department what they’ve disposed of in the event that state or federal assistance becomes available.

It "is not an easy thing to wrap your head around,” said Wisconsin Farm Bureau Federation President Joe Bragger, a dairy farmer from Buffalo County.

“It’s with a heavy heart I make this statement. The slight optimism that was floating around at the beginning of the year for our dairy farmers has been buried. We have entered unprecedented times as a society. Our farmers, especially our dairy farmers, are being served a big dose of the sad reality we are living in with the COVID-19 pandemic,” he said..

Bragger is urging farmers, processors, and other stakeholders in the dairy industry to stay connected and keep each other informed of their plans.

"As a dairy farmer myself, I am living and breathing this tough time along with our members throughout the state," he said.

The USDA did not return Journal Sentinel calls, but in an email said it was “actively monitoring all agriculture commodity markets” and would leverage its resources to alleviate market disruptions as necessary.

Even if the agency just announced that it was going to buy dairy products, it would lift the commodity markets and milk prices, according to Bauer.

“But they are so tone deaf they don’t even know that,” he said.

Milk prices could be depressed for months, putting further pressure on farmers as they head into spring planting. In 2019, Wisconsin lost more than 800 dairy farms, a rate of more than two a day, many of them small family-run operations.

"We are facing the complete restructuring of the dairy industry," said Daniel Smith, president and CEO of Cooperative Network, a Wisconsin and Minnesota group that represents cooperatives in dozens of fields including agriculture, health care and utilities.

Wisconsin's congressional delegation has urged Perdue to take action, including reopening enrollment in a program that helps dairy farmers when milk prices fall to unprofitable levels and making payments retroactive for all of 2020.

“Without a substantial intervention by the federal government, pay prices to dairy farmers will quickly fall to levels that are unsustainable, even in the short term, and could lead to a drastic loss in dairy farms," Farm First Dairy Cooperative, of Madison, said in a letter to the agriculture secretary.