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Guest Columns

Perspective:
Dairy Research

Wisconsin dairy is ripe for innovation

John Lucey

John Lucey, director of the Wisconsin Center for Dairy Research at the University of Wisconsin-Madison, contributes this column for Cheese Market News®.

How can we grow the dairy industry in Wisconsin?

I’ve been thinking about this question in my role as a resource person for the research and innovation subcommittee of the Wisconsin Dairy Taskforce 2.0.

I think we can all agree that we need growth and innovation in the dairy industry. The latest numbers from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP) show that more than 580 Wisconsin farms have closed this year. To put it another way, almost two farms a day are closing in Wisconsin. Unfortunately, this trend has been going on for decades. The question is what can we do to slow it down?

I’m not an expert in agricultural economics but as a dairy researcher I have some ideas about how we can potentially grow the market for Wisconsin dairy.

First, when talking about growing the dairy industry it is important to ask if we are talking about increasing milk production or shifting current milk volume to manufacture higher value products. Those are two different strategies and maybe we want to do both. However, I believe that simply producing more milk will not be enough to help the industry. We also need to focus on shifting more of our milk volume to the production of higher value products. These products, like specialty cheeses, yogurts and nutritional ingredients, have the potential to provide more revenue for our farmers by increasing milk value.

We also need to understand our consumers better — what are their tastes and expectations for dairy? Where are our consumers and potential consumers located? There are growing markets in the United States that we need to target but one of the biggest areas for potential growth is expanding our overseas sales. The U.S. Dairy Export Council (USDEC) reports that U.S. dairy exports utilize 15 percent of the nation’s milk supply.

However, USDEC estimates that can grow to 20 percent in the next three to five years. Currently, most of our exports are commodity-based products like powders and Cheddar cheese. We are just scratching the surface of these markets.

If we want to be successful in foreign markets, we need to understand the unique tastes and ways dairy is used across the world. This is why efforts like reverse trade missions are so valuable. By bringing foreign buyers to our state, we can learn exactly what they want in their dairy products. In turn, our research cheesemakers here at the Center for Dairy Research (CDR) can hone the make procedures for these products and then help plants in Wisconsin produce them to the exact specifications of the foreign buyers/consumers.

There is a lot of work underway in expanding dairy markets overseas. We are working closely with USDEC and others on these efforts. For instance, the Wisconsin Initiative for Dairy Export (WIDE), a collaborative effort between DATCP, CDR and other organizations such as the Dairy Farmers of Wisconsin, is connecting Wisconsin with foreign buyers.

Jack Heinemann, director of DATCP’s International Agribusiness Center, said the WIDE program is about creating a unified effort across the state to increase dairy exports. “By aligning all of our organizations and by working as a team, we can leverage resources to expand our export markets,” he said.

I believe there also is potential to expand the dairy market here in the United States. For instance, while the U.S. population is mostly holding steady, we are seeing an increase in ethnic groups like the Hispanic population. In 2017, this group constituted almost 18 percent of the U.S. population. The good news is this group is traditionally heavy consumers of dairy. Hispanic cheeses is an area that has been growing for the past 20 years and I think we could develop other dairy products for this market.

There is more good news for the U.S. dairy industry — the per capita consumption of dairy products in the United States is increasing. Yes, fluid milk consumption is down but more Americans are eating products like cheese and yogurt. For instance, Wisconsin produces almost 800 million pounds of specialty cheese each year and demand continues to increase. Wisconsin may reach the 1 billion pound mark for specialty cheese production within 10 years.

At CDR, specialty cheese has been a major focus for the past 30 years. We are in the process of building a new facility that will have nine ripening rooms and production space devoted to specialty cheese. We will continue to work very hard with companies to drive the demand of specialty cheese.

We also should explore creative ideas that could boost the industry. For instance, maybe we could work with dairy science and cattle breeding experts to develop “designer” milks. Up until now, we have used genetics to increase milk production. Perhaps we could use that technology to breed cows that produce milk with unique characteristics like milk with specific types of proteins or less allergens.

Sure, there are challenges with growing the dairy industry in Wisconsin but there are many things working for us. I think our expertise in dairy genetics and animal health in Wisconsin is among the best in the world. We have tremendously skilled and knowledgeable farmers and cheesemakers. We have experts in the manufacture of dairy equipment as well as controls. We have a cohesive, focused dairy industry working together at all levels from our farmers to our statewide organizations. We also have tremendous natural resources that allow for large-scale dairy production.

We have the expertise and resources in this state to take dairy to the next level. That’s why I think it’s important that we evaluate initiatives to spur innovation in farms, environment (soils and water), rural communities and product development. For instance, the University of Wisconsin has proposed a Dairy Innovation Hub that would train future and current industry leaders and build a world-class team of collaborators focusing on solutions to the complex challenges facing our industry. This is the kind of work necessary to ensure Wisconsin remains a thriving Dairy State for the next generation.

CMN

The views expressed by CMN’s guest columnists are their own opinions and do not necessarily reflect those of Cheese Market News®.

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