Federal dairy innovation program gets a boost from pandemic relief funds

By Erik Gunn

A federal program will give Wisconsin and 10 other states a $20 million boost to help farmers, cheese makers, and other dairy processors develop new products and new markets to help stabilize the embattled dairy industry.

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The funds, announced by Sen. Tammy Baldwin (D-Wisconsin) Monday at a Jefferson County cheese producer, will expand the Dairy Business Innovation Initiatives program in the U.S. Department of Agriculture (USDA).

USDA is giving the money to the Dairy Business Innovation Alliance, a joint project of the Wisconsin Cheese Makers Association and the Center for Dairy Research at the University of Wisconsin-Madison. The groups will provide grants and support programs so that farms, dairy processors and related businesses can "modernize, reach new markets and create economic growth," said Baldwin.

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"What we're trying to do is to create a stronger and more resilient dairy industry," said Rebekah Sweeney, who oversees programs and policy for the Wisconsin Cheese Makers.

Cheese production isn't the only focus for the program, but in Wisconsin, where 90% of the state's milk is processed into cheese, it's a natural beneficiary.

Some grants are offered to individual businesses to help them strengthen their operations, Sweeney said in an interview. Others are directed to address industry-wide problems, such as export strategy and methods.

To address persistent, long-standing and increasingly challenging labor shortages, still other grants might be used to implement labor-saving technology that can enhance efficiency, whether on the farm or in a cheese production or other processing business, she added.

"Our labor shortage isn't going away," Sweeney said. "This is going to be a continuing and significant problem in the years ahead."

The federal Dairy Business Innovation Initiatives program was created in legislation that Baldwin authored and that was enacted in 2018.

Since the launch of the program, the Dairy Business Innovation Alliance has issued more than $3.7 million in grants through the UW's Center for Dairy Research to 79 projects in Illinois, Iowa, Minnesota and South Dakota in addition to Wisconsin.

The new $20 million infusion will expand the innovation alliance's service territory to include Indiana, Kansas, Michigan, Missouri, Nebraska and Ohio. The money is part of $80 million total that USDA is providing to similar multi-state dairy innovation programs in the rest of the U.S. The money comes from the American Rescue Plan Act (ARPA), the pandemic relief legislation enacted in March 2021.

Projects for individual businesses will be able to seek grants for up to $100,000. Projects with an industry-wide potential impact will be eligible for up to $500,000, according to the Dairy Business Innovation Alliance.

At the Center for Dairy Research, the money will also help fund research to develop new value-added products as well as a new mentorship program, which will enlist experienced cheesemakers and other dairy business leaders to work with new entrepreneurs.

Jennifer Moffitt, USDA undersecretary for marketing and regulator programs, joined Baldwin in unveiling the ARPA-funded increase to the innovation program at a press conference Monday at the operations of Crave Brothers Farmstead Cheese in Waterloo, Jefferson County.

Crave Brothers received a $12,500 grant from the innovation alliance in 2020 to help pay for a new cheese-cooling system that recirculates cold water and uses cold air to finish the cooling process, conserving water and saving money.

USDA also will be providing another $22.9 million nationally under the innovation initiative program as part of the 2023 federal budget.

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