A surprise new change to federal grants has Wisconsin cheesemakers worried that some small dairy operations might not survive. Here’s what makes them nervous, and why Democratic U.S. Sen. Tammy Baldwin and industry leaders are calling on the United States Department of Agriculture to immediately undo the change.
🧀 What’s at Stake?
The Dairy Business Innovation Initiative (DBII) was created by Baldwin in 2018 as part of the federal Farm Bill. The program funnels federal grant money to help dairy farmers and producers through four distribution centers, including one at the UW-Madison’s Center for Dairy Research.
The money goes to help small dairy makers upgrade their equipment, diversify their products, and increase revenue streams. Since it was enacted, the program has distributed over $106 million in grants to 911 businesses in 41 states, mainly to support small businesses. This year, a total of $12.65 million in federal funds has been made available through the DBII. [WPR, Center for Dairy Research, WCMA]
💸 A Sudden Change
In September, without advance warning, the Department of Agriculture announced that those distribution centers must provide 25% matching funds in cash for all grants. That would equal over $3 million – and the distribution centers say they don’t have the money, which would force the program to end.
Bob Wills, owner of Cedar Grove Farms in Sauk County, said the federal grant money helped him pay for a new wastewater treatment system and to market the farm’s cheese curds. While the awards are relatively modest, he said, they can be crucial for small producers like him to compete with major producers.
Dairy industry experts believe the change originates from the federal Office of Management and Budget, led by Russell Vought. Lawmakers have excoriated Vought for making unauthorized budget cuts in a variety of areas without congressional approval, such as attempting to withhold $810 million in approved federal funding via a process known as a “pocket rescission,” a rarely used budgetary tactic used to negate spending that Congress has already allocated. [Wisconsin State Farmer, WKOW, NBC News]
🐮 Farmers Fight Back
The federal government tried to freeze the program altogether in 2025, but backed down after an outpouring of support from the dairy and farming industry. So advocates hope that public pressure can persuade the USDA to change course again.
On Oct. 12, Baldwin sent a letter to USDA Secretary Brooke Rollins urging the department to reverse the change. “This new financial hurdle comes at a time when dairy farmers are already struggling financially with fewer market opportunities and record-high fuel prices amid President Trump’s trade war and war in Iran,” Baldwin wrote.
A coalition of 28 industry groups has joined the call to reverse the change. The Wisconsin Cheese Makers Association said in a press release: “Dairy businesses need every available tool to improve efficiency, develop products, reach new markets and strengthen demand for farmers' milk,” wrote Rebekah Sweeney, WCMA Senior Director of Programs & Policy.
Rollins was in Madison at the World Dairy Expo on Sept. 30, and did not directly address the DBII change. She pointed at $14 billion in new dairy processing and infrastructure investments nationwide, and said new trade markets are opening up for dairy products around the world.
