Editor’s note: Agri-View is featuring a series on dairy farmers and other individuals serving on Wisconsin Dairy Task Force 2.0.
LAKE MILLS, Wis. – Charles Untz has worked on transitioning his dairy farm to his son, Jason Untz, for the past several years. It’s difficult for dairy-farm families to make mutually beneficial transitions given the past few years of depressed milk prices, the farmer said.
The dairy industry needs solutions to business-transition issues. Untz, 68, said that’s why he joined the generational-succession and transition subcommittee of Wisconsin Dairy Task Force 2.0. The subcommittee discussed three main issues at its latest meeting, which was held Jan. 21 in Mauston, Wisconsin.
- wealth transfer, generational transition-taxes
- next generation needs opportunities, ability to begin dairy farming
- generational farm transfer
A dairy farm – like any business – must make money, Untz said. Lenders today are requiring that to be eligible for a loan, a beginning dairy farmer must have a market. While large retail companies are able to provide markets, they favor large dairies due to efficiency and logistics. Smaller-scale farms rely on smaller-scale dairy processors, which currently can’t borrow enough money based on their equity.
Depressed milk prices and the difficulties in obtaining loans are dissuading young people from entering the dairy business. The generational-succession and transition subcommittee discussed whether tax incentives could help address the issue. The group discussed making a recommendation to reevaluate the Wisconsin Beginning Farmer tax credit, possibly adding an educational requirement to it.
The group also discussed the possibility of transforming the “Grow Wisconsin Dairy 30X20” program. The program was established by Wisconsin Gov. Scott Walker in 2012 at a time when dairy farmers couldn’t keep pace with processor needs for milk. The program was launched to help the industry produce 30 billion pounds of milk by 2020. Wisconsin’s dairy farmers reached the 30-billion-pound mark as early as 2016.
Dairy farmers in Wisconsin as well as around the world have become so productive that oversupply has depressed milk prices for the past few years. That has caused some in the industry to call for supply management.
The Grow Wisconsin Dairy 30X20 program in January 2018 was re-purposed and became the Governor’s Family Farm Fund. The fund is intended to increase support for protecting soil and water quality, and to improve dairy-farmer profitability in various markets.
The generational-succession and transition subcommittee at its recent meeting discussed the need for more resources to help beginning farmers. The group also discussed the need for more resources to help farmers with transition and succession planning. The group agreed to the next steps, drafting recommendations in five areas.
- evaluate the former Beginning Farmer and Farm Asset Owner Tax Credit
- state investment in dairy scholarships
- state investment in transition and succession-planning support
- financial assistance for sponsors of registered apprenticeships
- additional resources through the Wisconsin Department of Agriculture, Trade and Consumer Protection, the University of Wisconsin-Extension and the Center for Dairy Profitability
Untz and his son milk 120 cows and manage 300 total head of cattle. They also farm 1,000 acres.
“We formed a C corporation with 50-50 ownership, and I’m transferring my share of the ownership to my son,” Charles Untz said.
In addition to firsthand experience with business-transition planning, Untz has served on the audit committee as well as the government and public-relations committee of Dairy Farmers of America. With those experiences, he said he thought he could contribute to Wisconsin Dairy Task Force 2.0.
“Land prices are out of reach for most people and older farmers are retiring,” he said
Something needs to be done. Untz and his peers on the task force are doing what they can to help others in the industry – both old and young.
The Wisconsin Dairy Task Force 2.0 was formed in June 2018 to study the state’s dairy industry and make recommendations to address short-term and long-term challenges. The task force is comprised of more than 30 farmers, milk processors and allied-industry representatives. Task-force members were recommended by various agricultural organizations and were selected by Wisconsin Department of Agriculture, Trade and Consumer Protection then-Secretary Sheila Harsdorf and University of Wisconsin-System President Ray Cross. Task-force members met the first time in August 2018 and have since selected subcommittees on which to serve. Visit datcp.wi.gov/Pages/Growing_WI/DairyTaskForce.aspx for more information.