BROOTEN, Minn. — Lucas Sjostrom is the executive director for the Minnesota Milk Producers Association. He lives on Jer-Lindy Farms, which is operated by his parents-in-law. His wife Alise operates Red Head Creamery, an on-farm artisanal cheese plant, a short walk from the dairy barn.
This being Dairy Month, The Land visited with Sjostrom recently to discuss current issues in the dairy industry.
The Land: What is Minnesota Milk Producers Association?
Sjostrom: We’re a membership organization that works on policy, education and membership benefits for Minnesota dairy farmers. We don’t receive check-off dollars. We are strictly a volunteer membership organization.
The Land: Do you have time to milk the cows?
Sjostrom: I milk about two to three times per month. My parents-in-law run the farm and my wife runs a cheese plant. I help out where and when I can — it is my hobby and our business in one.
The Land: MMPA recently chalked up a victory for dairy farmers at the Minnesota Legislature. Can you explain what that was?
Sjostrom: We secured eight million dollars for Minnesota’s dairy farms. They’ll see a ten cents per one-hundred pounds of milk rebate in an initial payment if they sign up for the five-year Dairy Margin Coverage program, and probably another five to ten cents for 2018 production in October. Both are based on their 2018 production level. I think a lot of farmers and their bankers are unsure whether they should be signing up. This legislation takes some of the risk off their shoulders.
The Land: MMPA sued the Minnesota Pollution Control Agency over the rules regarding the thirty day public comment period for an Environmental Assessment Worksheet. Why did you do that and what was the result?
Sjostrom: We thought and we still think — although a judge ruled against us — that the law pretty clearly states that the Pollution Control Agency has thirty days to decide on an Environmental Assessment Worksheet. They give themselves a lot more extensions than we thought were allowed in the law. This may not seem like a big deal in the abstract, but when you stop to consider the investment that goes into a project before the EAW and the number of different people — including engineers, contractors, lenders, and suppliers — to get a new feedlot, airport or housing project constructed and operating, the uncertainty in how long the environmental review process causes significant difficulties for farmers who are trying to invest in their operations and make them sustainable for future generations. With animal biology, it is probably more important for a feedlot than any other structure.
It’s disconcerting when we thought the law was written clearly and it leads to uncertainties for farmers that want to do a project.
Ultimately, even though the court disagreed with us on the existing law, our lawsuit drew attention to this important issue. And during the recent session, the legislature and the governor recognized the need to balance both public involvement in the environmental review process and the need for definite timelines to allow project proposers to plan their projects, and they amended the statute to allow one extension of up to 30 days, but then to require the consent of the project proposer for any further extensions. We believe this was a good change and appropriately addresses the issue that we raised in our lawsuit against the MPCA.
The Land: You were a member of the Minnesota Environmental Quality Board’s Environmental Review Advisory Panel. Did you discuss the thirty day comment period for EAWs in that group.
Sjostrom: Yes. We don’t actually have a problem with any of the environmental regulations of the State. Our problem is more with the process and uncertainty in timelines, especially when you’re breeding or buying animals to fill a facility.
I think there is some agreement among almost all of us on the Panel who come from opposite ends of the issue. People want more transparency. Currently, there are so many levels to the process that the public often doesn’t know what they are commenting on. And on the side of the permit applicant, we’ve have so many county and township and other permits added on since the environmental review process began that we just hope that farmers get a little more credit for the stuff that they are already doing.
The Panel just issued a report to the Environmental Quality Board that almost everybody concurred to. It doesn’t matter if you’re an environmentalist or a farmer wanting to build a project, the process could be improved for all Minnesotans and it would save money and time.
The Land: Your interest in Minnesota’s Environmental Review Process seems to be focused on larger dairies. Is MMPA doing anything to help smaller dairies?
Sjostrom: We hear that question a lot. Our goal is to help every type of dairy farm. I think that people kind of forget that if we don’t improve unnecessary regulations with the larger dairies, the tendency is to get these regulations onto smaller and smaller farms. The current trigger to start an Environmental Assessment Worksheet is about 714 cows or 1,000 animal units. That was kind of picked out of the blue. That’s affecting larger farms today. But if legislators wanted to, they could say, “let’s do it for 200-cow dairies or 50-cow dairies.”
The Land: What role do exports play in the Minnesota dairy economy?
Sjostrom: Exports are significant. We export one day’s milk production per week. One big example for the export market is whey permeate and lactose for feeding pigs. Unfortunately, with African swine fever in China, that whey permeate market is drying up. But we’ve recently heard China is slaughtering their domestic dairy herd because the pork supply is so short, so it may benefit dairy in the end.
The Land: Are tariffs playing a role in Minnesota’s dairy industry?
Sjostrom: Dairy has been part of the tariffs since the beginning. Mexico is our number one market and Canada is number two. We’re excited to see a renegotiated NAFTA/USMCA come closer. Tariffs are taxes on Americans, and we want them to go away.
The Land: Are Minnesota dairy farmers struggling right now?
Sjostrom: The easy answer to that question is yes. We did a survey not too long ago where almost half of the farmers surveyed were having trouble getting financing or didn’t like the financing they were getting. We’ve heard stories of entire banks just off-loading their dairy clients. That’s troubling if a bank has lost faith in our entire industry.
But there are also opportunities when the price is low. Sometimes that allows people to innovate or young farmers to get in ahead of the upswing.
We’re happy to see young people getting into dairy and over the long term we’re optimistic and excited to see growth in Minnesota dairy.