1. A Producer Perspective on Dairy Industry Trends
2019 Wis. Ag Outlook Forum Renk Agribusiness Institute College of Agricultural & Life Sciences
Pete Kappelman
Meadow Brook Dairy Farms, LLC
Manitowoc, Wisc

2. Claire Bethany and Greg Gierke Kenny and Lucy
Pete and Shellie Kappelman
Erin & A.J. Kenneke
Claire
Mitch Kappelman
450 Reg. Holstein and Brown Swiss
All calf and heifer raising
1100 Cropping acres
Forage and Grain Production

3. 1985 CALS Grad (Dairy Sci)
Land O’ Lakes Board
National Milk Prod. Fed. Board
Testimony to Congress, Int. Trade Comm., DOJ
Ag Policy Advisory Comm.
USDA & USTR
USDEC
DMI
PDPW

4. Economic Impact of Price Cycle Swings for a 450 Cow Herd
x = $15.31
x = $19.04
Approx.14 Million lbs/yr
The accumulated difference between and =
More than $2,000,000
x = $15.36

5. Impacts to the Producer Mindset*
(A disposition that predetermines a person's responses to a situation.)
Morale is low and stress levels are high.
Frustration and anxiety entering the 5th year of what we view (traditionally) as a low price period.
Current attitudes of low self-esteem and doubt regarding their skills and management abilities.
In some cases there are feelings of guilt, shame, depression and desperation.

6. Assumptions for the Continuation/Acceleration of Change
Technology will be applied to dairy farming practices at an increasing rate (monitors, sensors, etc. that allow artificial intelligence to facilitate robotic control and automation)
Economies of scale will continue
Price cycles of consolidating commodity industries get longer and deeper. Much of “dairy” will remain a commodity and still cycle.
Consumer preference, buying practices and perceptions of food production methods will continue to evolve
Trends in labor availability and cost

7. What We Cannot Predict…
Proliferation of populism and national sovereignty
Will the U.S. be allowed to be a low-cost global dairy exporter?
Tariffs, Direct payments, Green payments, SPS barriers, Geographical Indications, etc.
Will consumers grow to learn and embrace the science of improved plant breeding and sustainability?
82% of Americans support mandatory labelling of foods produced with genetic engineering.
80% of Americans support mandatory labelling of foods containing DNA.
J. Lusk, Oklahoma State Univ., 2015 Food Demand Survey

8. What We Know About the Future…
Business will be… business, as usual
Cost structure – Don’t need to win the race to 100,000 cows
Balance sheet strength / Debt level
9 Billionish
A growing number of consumers are demanding “farmer intimacy” and through the use of technology will get it (Niche marketing, small artisanal cheese factory, farmer owned… and marketed co-ops)

9. Questions?