A bill moving through the Wisconsin Legislature would offer low-interest loans to small dairy farmers to boost efficiency as the state’s dairy industry rapidly consolidates into larger industrial operations.
But ahead of the state’s legislative session, which resumed in early January, major farm and dairy industry representatives pushed for changes that would allow large industrial farms to access the loans, according to lobbying communications and draft legislation obtained by Investigate Midwest through open records requests.
The state has lost nearly 18,000 dairy farms over the past two decades and, as of 2022, has roughly 6,000 operating dairy farms, with small-scale farms dwindling rapidly.
Wisconsin dairy farms with fewer than 500 cattle have decreased 67% since 2002. Almost every county in the state has lost at least half of its small farms in that same time, according to an Investigate Midwest USDA data analysis.
Senate Bill 323, introduced in July 2025, would set aside $20 million to create an innovation program for dairy farmers in the state to fund the purchase of new equipment or expand animal health practices to produce more milk. Farmers would apply through the state’s agriculture department.
Bill authors said farmers could also use the funds to develop manure management plans, create products from manure, and improve animal health and outputs to produce higher-quality products, such as buttermilk. Medium and small dairy farmers can access up to $500,000 administered by the state’s agricultural department.
The bill was passed by the Senate 18 to 15 on Jan. 21 and can now be heard by the State Assembly.
Dispute over dairy herd sizes
State Sen. Rob Stafsholt, a New Richmond Republican who authored the bill, said economic sustainability has been an issue brought to him by farm operators throughout his rural, northwestern district.
“Some of the technology that can make farmers as efficient as possible and would help the smaller guys to compete with the bigger guys is often financially out of reach for our small and medium farms,” he said.
The Wisconsin dairy industry is worth nearly $53 billion and its farms have become increasingly larger in recent years, while the overall number of farms continues to decrease. This trend has created legal clashes between rural towns and dairy farms across the state.
Bigger farms increase profitability by working with consolidated dairy processing companies. Small operations also work with large-scale processors but often rely on boutique dairy product sales, such as those from small-scale creameries or co-ops.
Cost is a major factor in the decline of small farms. The cost of operating a dairy farm in the U.S. has nearly doubled in the last decade, while the price farmers receive for their milk has fallen 15% in the same time frame, according to an analysis of USDA data.
The Wisconsin Farm Bureau and The Dairy Business Association, lobbying and advocacy groups for the state’s dairy and agriculture sector, both asked bill authors to remove the bill’s limit on the number of animal units a farm could have to apply for funding.
In Wisconsin, animal units are a metric primarily used to determine whether a farm meets the threshold for being considered a concentrated animal feeding operation, otherwise known as a CAFO. A single animal unit does not equate to a single animal. For example, a dairy cow is the equivalent of 1.4 animal units, while it would take roughly 30 chickens to equal a single animal unit.
Farms with 1,000 or more animal units have to apply for additional permits through the state’s Department of Natural Resources to manage waste. As farms get larger, increased waste can lead to runoff and pollution problems for nearby communities and waterways. Livestock runoff has been linked to cancers, infant deaths and miscarriages.
The current bill language sets an applicant’s limit at roughly 999 animal units, or roughly 700 dairy cattle.
In a letter to the bill authors, the Wisconsin Farm Bureau requested that the cap be removed, allowing the size of the farm to be part of the determination when applying for funding, rather than disallowing a larger farm from applying altogether.
“By aligning the program’s design with its intent, the bill can more effectively support on-farm innovation and ensure that Wisconsin farmers of all sizes have the opportunity to modernize, improve herd health, and maintain our state’s leadership in agricultural innovation,” the letter stated.
The Dairy Business Association, a trade group headquartered in Green Bay and operated by a board of executives with ties to CAFOs across the state, dairy processors and cheesemakers, told lawmakers in a letter that the state’s large farms provide stability to the milk supply and should be a part of the funding pool.
“A strong dairy economy depends on participation from farms of all sizes,” the letter states. “If this program’s eligibility criteria exclude large farms, the ripple effects will weaken — not strengthen — rural Wisconsin.”
Records show that Dairy Business Association lobbyists met with bill authors soon after the bill text was circulated in early June 2025 to discuss the herd size provision and other concerns with the legislation. The Dairy Business Association did not respond to requests for comment.
The office of State Rep. Clint Moses, a Menomonie Republican who co-introduced a similar bill in the state’s assembly, provided an early draft of a bill amendment to Dairy Business Association lobbyists ahead of the release of the amendment, according to an Aug. 5, 2025, email.
Despite meetings with lobbyists to express concerns about the bill’s language regarding herd size, the language has not changed to remove the animal unit cap.
Darin Von Ruden, president of the Wisconsin Farmers Union, said that if the legislation caps farm size, the funding will help more farmers. He said the Wisconsin Farmers Union supports maintaining the animal unit limit in the current legislation and will continue to watch the bill closely.
“The dollars that are available there could be easily swallowed up by two or three of the biggest farms in the state, and then nobody else will be able to be a part of that process,” Von Ruden said.
Stafsholt, the senator who introduced the bill, said the original purpose of the bill was to support small and medium-sized farms and keeping a limit on animal units will stop large farms from taking larger pieces of the program’s budget.
“Going forward, I have no intention of switching that number,” he said.
Bill addresses dairy’s undocumented workforce
The bill also points to the realities of drafting legislation affecting the dairy industry and navigating the sector’s open secret: undocumented labor.
Draft legislation shows bill authors intent on blocking farms that use undocumented labor from qualifying for the loan program. The current version of the bill would only allow farms that employ workers who are authorized to work in the state to apply for the program.
There are no definitive counts of the number of undocumented laborers working on Wisconsin dairy farms, but research estimates that nearly 70% of the state’s dairy industry relies on undocumented labor.
“I don’t have an issue with [farms] doing what they are doing,” Stafsholt said. “It’s more about following the law. We want to make sure taxpayer dollars funding the dairy cattle innovation program are not necessarily being utilized by those who fail to follow the basic law.”
In September 2025, Immigration and Customs Enforcement officers arrested dairy farm workers in Manitowoc County as part of a larger raid in the area. This comes as ICE raids have hit major agricultural industries and cities, detaining workers and increasing anxiety throughout the labor force.
Lobbyists from both the Farm Bureau and the Dairy Business Association initially expressed concerns about the impact this limitation would have.
In an August email from a member of Stafsholt’s staff to the senator, meeting notes show that Dairy Business Association representatives expressed concerns about the original requirement that farms employ only individuals legally authorized to work in Wisconsin, but that language remains in the current version.
“After conversations with the Wisconsin Department of Agriculture, Trade and Consumer Protection on how the bill provision will be facilitated and discussions with the bill authors, staff, and stakeholders, we are not prioritizing changing that provision,” Jason Mugnaini, a Wisconsin Farm Bureau lobbyist, told Investigate Midwest in December.
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