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July 1992

State Roundups
Wisconsin

Number of dairy farmers and cows shrinking

Alarms sounded in the nation's leading dairy state when the U.S. Department of Agriculture (USDA) reported a dramatic drop in the number of Wisconsin dairy cows this spring.

The USDA survey cited a drop of 4,000 cows from February to March, the lowest count since 1931, leaving the state with 1.655 million cows. Since March 1991, the total number of cows declined by 83,000, the greatest yearly loss since 1966.

Although these figures may be of some concern to the state's more than 31,000 dairy farmers and others in the industry, it should be remembered that Wisconsin still produces about 24 billion pounds of milk annually, about 17 percent of the nation's supply. Second place California produces about 22 billion pounds, and New York is a distant third with 10 billion pounds of milk.

The root of the problem lies in volatile milk prices and low dairy price supports, according to Robert Cropp, dairy marketing and policy specialist at the University of Wisconsin, Madison. In addition, many small farmers have not kept up with technology and updated herd management techniques, Cropp says.

But the declining number of cows is nothing compared to the decline in the number of dairy farmers. About 1,000 dairy farms disappear each year, and Cropp predicts that up to a third of Wisconsin's dairy farmers will be out of business by the end of the decade.

That trend is a concern because livestock has a very high multiplier effect. "The farmer needs to buy seed and feed and the milk needs to be processed," Cropp says. "There's a lot of infrastructure tied up in dairy." And some land in Wisconsin is good only for livestock.

Cropp cites an example of how that multiplier effect can work: When some dairy farmers near Amery went out of business, the local farm supply coop felt such an impact from the lost revenue that it resorted to opening a restaurant to stay afloat.

But while Cropp sees signs of decline in dairy farming, he also notes some positive changes. Younger multiple-family operations are growing. "Chances are these farmers will buy more in the community than a one-family farm," Cropp says. And some farmers are also investing extra money to upgrade, but there's not enough of that, Cropp says. "Some banks have lost money on dairy farms, and now they're being conservative about lending."

Uniroyal closes doors, Eau Claire primed

When Uniroyal Goodrich Tire Co., once the city's largest employer, shut its doors on the last 600 workers at the end of June, Eau Claire was prepared.

The company laid off employees gradually following the January 1991 announcement of the closing. And Uniroyal and Eau Claire community leaders immediately began preparing the 1,375 work force and the city for the loss of Uniroyal's $45 million annual payroll.

State and federal aid and educational assistance packages have been funnelled through the Employee Assistance Center, jointly sponsored by the company, the union and the city's Private Industry Council. The center will remain open to help workers for at least the next six months, according to center staff worker Elaine Dekan. "We'll be here if they just want to come in and talk," Dekan says.

Workers have taken advantage of aid through the federal Trade Adjustment Act (TAA) that provides the community with a buffer against the loss of wages, Tabor says. Through the TAA, funds have been made available to workers for two years of training and for extended unemployment benefits. While this money doesn't replace the payroll, it does cushion the blow, Tabor adds.

Over the past year nearly 200 workers transferred to another Uniroyal plant, 300 enrolled in retraining or other educational programs, 325 have reached retirement eligibility and the rest have found other jobs or remain unemployed.

According to Tabor, the Job Service shows that numerically most of the lost jobs have been replaced, but not at comparable salaries or duties. "Quality jobs are what the community is looking for," Tabor says.

To that end, the private Eau Claire Area Industrial Development Corp. is constructing two small buildings in industrial parks across town from each other to entice new businesses to locate in the area.

And local financial institutions have put together an $11.5 million loan pool to primarily finance the cost of leasing buildings by development corporations to further encourage new business activity. "We have a shortage of buildings in Eau Claire," says Mike Schatz, the city's economic development specialist, "and without that availability we have little to show."

The city has also created a $600,000 revolving loan fund that will make money available to Uniroyal workers who want to start or buy their own business, and to existing business operators whose plans would create jobs for laid-off Uniroyal workers. The first approved loan application was from former Uniroyal workers to start a specialty cleaning operation.

Meanwhile Uniroyal and a committee of civic and business leaders are working on plans for the 1.9 million square foot vacated plant. "Under the right circumstances the plant could be the right space; it's not something a lot of communities have," Schatz says.

—Kathy Cobb