Milk Contractors

​​​​​​​​​​​​​​​​​​​​​​​​Bureau Home​​   /   Agricultural Producer Security   /   Milk Contractors​

A milk contractor is ​anyone that procures producer milk​ or markets producer milk as a producer agent. A milk contractor that procures producer milk in Wisconsin must obtain a milk contractor license from the Wisconsin Department of Agriculture, Trade and Consumer Protection (DATCP)​ and must comply with Wis. Stat. ch. 126 and Wis. Admin. Code ch. ATCP 100.​

A milk contractor does not include any of the following:

  • A person who merely brokers a contract between a milk producer and a milk contractor without becoming a ​party to the contract, taking control of milk, or accepting payment on behalf of the milk producer.

  • ​A person who merely buys or sells milk on a board of trade or commodity exchange.

​

Licensing

All milk contractor licenses expire on April 30 of each year. Licenses may not be transferred or assigned, and fees for a license issued after the start of the license year ar​e not prorated.

Milk contractors are also required to file a financial statement if the license application indicates more than 150,000 hundredweight (cwt) of milk procured, or estimated to be procured, from producers and producer agents or if deferred payment contracts are used. Financial statements must be filed each year along with, or prior to submitting, the license application. The financial statement must be either reviewed or audited by an Independent Certified Public Accountant (CPA) based on the following thresholds:

  • If the license application indicates milk procurements from producers of more than 150,000 cwt but less than or equal to 2,500,000 cwt, either a CPA-​reviewed or audit​​ed financial statement may be filed.

  • ​If the license application indicates milk procurement from producers and producer agents of more than 2,500,000 cwt, an audited financial statement must be filed​.

Additional Licensing Requirements​​

  • ​Pay producers and producer agents by ​the 4th and 19th of each month, or in accordance with a written deferred payment contract, ​and provide producers and producer agents with pay statements disclosing specific information with each payment.

  • Pay monthly Agricultural Producer Security license fees and Division of Food and Recreational Safety procurement fees.

  • Each June, provide a notice to producers and producer agents regarding the milk contractor's participation in the Fund. The specific dis​closures can be found in Wis. Admin. Code § 100.20(2)​.​​

  • Maintain fire and extended coverage insurance as required under Wis. Stat. § 126.43(1) sufficient to cover the value of all milk and milk products in the possession, custody, or control of the milk contractor.

  • Maintain accurate records and accounts of milk receipts, payments, and amounts owed to producers for a minimum of six years. These records must be made available to DATCP for inspection and copying upon request.​

​​​Fund Assessments and S​ecurity

In most cases, milk contractors are required to participate in the Agricultural Producer Security Fund (Fund). For milk contractors that are required to file a financial statement, the contractor’s current ratio and debt-to-equity ratio are used to determine Fund assessment rates. The Milk Contractor Assessment Calculator can be used to estimate your amounts.

Under certain circumstances, a milk contractor may reduce its fund contribution and financial statement filing requirements by filing a ​default claim waiver​. [Refer to ​Wis. Stat. § 126.70(1)(b).]​

In some cases, milk contractors may voluntarily, or be required to, file security in addition to participating in the Fund. Security may be in the form of cash, a surety bond, or a letter of credit.​

Milk contractors that file a reviewed or audited financial statement showing negative equity when first licensed are automatically disqualified from participating in the Fund. A disqualified contractor must file and maintain security with the department in lieu of participating in the Fund. The amount of security required to be filed must be at least 75% of the highest milk payroll obligation as determined by statute.​


File a Default Claim

If you are a producer​ that has not been paid for milk, file a​ default claim (refer to ​instructions).​


For more information about the Agricultural Producer Security program, call our offices at (608) 224-2998 or Scott Manthey at (608) 224-4966.