VIROQUA, WI — Several years ago, with milk selling high, David Slack built a new dairy barn.
“That was the big mistake,” he said.
Soon after the construction, milk prices cratered by several dollars. Key commodities he grew, such as corn and soybeans, followed suit, and Slack started down the path of filing for bankruptcy in 2019.
In recent years, Wisconsin has had the most farmers file for Chapter 12 bankruptcy, which is intended to restructure debts and save the farm. But the area where Slack lives, a hilly stretch of traditional and organic dairy farms, has a particularly high concentration.
Bordering each other in southwestern Wisconsin, Vernon and Monroe counties have had 35 filings combined since 2013 — more than any other neighboring counties in the Midwest, according to a Midwest Center for Investigative Reporting analysis of bankruptcy data.
Several factors have crunched farmers nationwide recently: The trade war. Unpredictable weather. Debt not seen since the 1980s crisis. Increasing costs of production. Decreasing income. Low commodity prices. Pressure to expand in order to compete. Suicide.
Last year, the country’s total number of farm bankruptcy filings jumped 20 percent from the year before. But many farmers decide to get out before it reaches that point: In the past year, Wisconsin lost about 10 percent of its dairy farms, according to state figures.
With the coronavirus outbreak, the outlook is bleaker.
[Click here to search the Midwest Center's database for the number of farm bankruptcies in your area.]
Theories why these two counties have a high number of bankruptcies include the hilly landscape, which leads to smaller plots of land at a time when farms have to scale up to compete, and the federal government’s decision about 15 years ago to phase out much of tobacco planting, a crop many dairy farmers here used to augment their incomes.
But neither fully explains the concentration, experts and community members said.
“Each situation is its own unique situation,” said Bill Halfman, Monroe County’s agriculture agent.
Monroe’s economy has been relatively stable in recent years. While losing hundreds of farms, the overall value of products sold that were produced in the county didn’t change between 2012 and 2017, according to the latest Census of Agriculture figures.
Vernon County, with the most farm bankruptcies in the state since 2013, is in more of a bind. It has lost hundreds of farms, too, and the value of products sold dropped by about 18 percent between 2012 and 2017.
Dairy prices had been expected to rebound but likely won’t until the Covid-19 outbreak is contained and some form of normalcy returns, experts said.
When the coronavirus crisis hit, “dairy farms in particular were just starting to breathe a sigh of relief as prices and profitability started to return,” said Kevin Bernhardt, a University of Wisconsin-Platteville agribusiness professor.
Because of the lack of demand from closed schools and restaurants, farmers are dumping their milk, according to the Milwaukee Journal Sentinel.
Organic Valley, a farmer-owned cooperative based in Vernon County that is a major economic engine for the area, had weathered a few years of being unprofitable, said Travis Forgues, the executive vice president of membership. However, before the virus, the cooperative was feeling optimistic about the future, he said.
“We’re hoping the economy is still there,” he said.
The county-level data the Midwest Center examined is through the end of 2019 and doesn’t reflect any potential coronavirus impact. But the outbreak is likely to force farmers to contemplate their futures, said Paul Mitchell, a University of Wisconsin-Madison agriculture and applied economics professor.
“It is going to upend everything,” he said. Now is the time farmers might think, “Is it time to buckle down and keep going or is it time to get out?”
For Slack, 64, even before the outbreak there didn’t seem like much choice.
At his peak, he farmed about 900 acres. Now, he has less than half of that, and he’s listed it for the bankruptcy, he said.
“I sold the cows last fall. Didn’t even get market price. Took a big hit there. My machinery is getting worn out. I haven’t updated for quite a while, just been fixing, so I’m sure that’s not going to bring anything. Paying a lot of interest, that’s what’s killing me,” he said.
Slack is a fifth-generation Vernon County farmer. He wanted his grandkids to take over, but, he said, they can’t if “there’s no money in it.”
He’s holding out hope someone might buy the land then lease it to him.
Another nearby farmer went through a bankruptcy recently. He delivers mail now, Slack said.
“He’s younger than me so he had a little bit of a chance to start over,” he said.
He doubts the bankruptcy will save his farm.
“I think it’s just prolonging the agony,” he said. “It’s all going to be gone. I don’t know what to think anymore. I don’t know if I should care or what to do.”
“Farming has changed so much”
In the 1950s, Donald Langaard, 86, hauled milk and cheese around Vernon County. Farms dotted the hillsides. On the ridge where he’s lived for years, about a dozen farms operated, he said. Two remain.
“Farming has changed so much,” Langaard said. “It’s just so unreal to drive around. Everything is gone. It’s just the big ones got bigger and ruined everything.”
In 2012, Monroe County had about 1,900 farms. Five years later, it had about 1,500, according to ag census figures. Vernon County had about 2,200 in 2012, but dipped below 2,000 in 2017.
At the same time, the average size of a farm has increased. In Monroe, it went from 175 acres to 193. In Vernon, the increase was 155 acres to 172.
Another difference: no tobacco.
Many dairy farms supplemented their incomes with small patches of tobacco plants, said Ben Wojahn, Vernon’s county conservationist. Tobacco was heavily regulated and provided a reliable stream of cash, according to USDA research.
It was labor intensive, but it paid better than other crops, according to the La Cross Tribune.
"I don't know how many guys have come up to me over the years and said, 'George, if it wasn't for you and my tobacco crop, I wouldn't own my farm,'" George Nettum, who managed the area’s tobacco pool, which was how farmers were paid, told the La Crosse Tribune in 2005. "If you had a good tobacco crop, you could buy a farm. It made that much of a difference. When the tobacco checks came in you could see it downtown."
In the mid-2000s, the federal government instituted a buyout program because of a glut of tobacco. Farmers received a decade’s worth of checks to stop planting it, according to the Tribune.
The area’s farmers still haven’t found a replacement, Wojahn said.
“If you’re doing big or get out, you probably want to be big and square"
Galen Pittman has handled farm bankruptcies in western Wisconsin for five decades, and his law firm has represented most of the farmers in Vernon and Monroe counties. In the 1980s, he said, those counties seemed like the hardest hit, too.
His theory is that, one, many small dairy farms still exist here, and, two, the hilly landscape might not be the best for planting large amounts of cash crops, he said.
Glaciers never sanded down the area, known as Driftless, resulting in hills and valleys. The one-lane roads have blind corners and rollercoaster descents.
To ensure the soil doesn’t slip down hillsides, crops are planted in a striped-shirt pattern. It encourages conservation but, also, farmers can’t plant their entire fields.
“Does Driftless have more challenging territory than Kansas? Probably,” Organic Valley’s Forgues said. “If you’re doing big or get out, you probably want to be big and square.”
But the landscape doesn’t explain the high number of bankruptcies, he said. Mitchell, the UW professor, agreed.
He looked into the high number of farm bankruptcies in Wisconsin recently. He came up empty.
“That was the frustrating part,” he said. “You couldn’t find anything that made the state stand out as different.”
“Size isn’t always a competitive advantage”
Downtown Viroqua, Vernon County’s largest town with about 4,400 people, could be called bustling.
It has a wine bar, a theater and a bike shop — no boarded-up windows in sight. The food coop could be confused for a Whole Foods, with a salad bar and staffers in their 20s. Recently, the Blackhawk Grille’s burger of the month was topped with kimchi, a Korean staple. And the local American Legion sold a hamburger patty made of almonds.
“You wouldn’t be seeing what’s going on in Viroqua without the organic agriculture that surrounds it,” Forgues said.
CROPP, the farmer-owned cooperative that produces milk for the Organic Dairy brand, fuels lots of the area’s economic activity. Started in a small building in Vernon County in 1988, the cooperative has grown to include a distribution plant in Monroe County and members in 34 states, Canada and Australia.
The cooperative provides a stable sale price for its members, which allows them to plan their expenses more consistently, Forgues said.
Like the surrounding area, a hallmark of the cooperative is smaller operations.
Wisconsin averaged about 142 dairy cows a farm in 2017, according to the latest ag census. Monroe County averaged about 90, and Vernon averaged about 50.
Forgues said the average number of dairy cows on its member farms is about 75.
“Size isn’t always a competitive advantage,” he said.
Organic operations come with their own challenges, though. Wojahn, the county conservationist, said organic might pay more, but it might cost more to keep things running.
“We’ve seen organic dairies go out of business,” he said, “ones we thought would make it.”
But, overall, Forgues said, the area is better off than some others. He grew up on a Vermont farm in the 1980s. His dad has seen agriculture degrade over time there, he said, but Vernon County still has some life to it.
“My father would visit,” he said, “and say, ‘You can feel the soil breathing.’”
Sky Chadde is the Midwest Center’s Gannett Agricultural Data Fellow. He can be reached at email@example.com. This story was produced in collaboration with Wisconsin Watch, a nonprofit, nonpartisan investigative reporting organization that focuses on government integrity and quality of life issues in Wisconsin.
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