Mr Partridge said dairy farmers would need to think about the proposal carefully because it could be a significant cost to their operation.

And Uglow worries Grassland won't be the only processor to drop farmers.

Farmers were given so little notice of the terminations.

Five dairy farmers recently lost their contracts with the Parmalat-owned processor due to an oversupply of milk. Von Ruden also disputed Grassland's assertion that the terminations were necessary because of a "sudden" change in Canadian dairy policy.

Goedhart Westers from Grassland said few processors in Wisconsin export ultra filtered milk, so other companies probably won't be affected by the latest change. Milk production in the 2.5 percent above last year's levels.

"The affected farmers would be in a much better position today if they had received advance warning from Grassland months ago to curtail their production", Von Ruden said.

"All Canadian dairy processors are entitled to source from any supplier they want, just like the United States of America processors, said DFC Director of Communications, Isabelle Bouchard, "Nothing has changed in Canada".

"Grassland's announcement really isn't good for anyone", North said. Milk supply management should not be achieved by summarily dropping existing members.

"They have shifted the incentives to Canadian buyers to make it less attractive for them to keep buying from the US and financially more attractive to buy from Canadian farmers instead", she added. It is in regard to dairy policy. "Any disruption in exports of dairy would have a devastating ripple effect on our farms and beyond, to workers in processing, transportation, and countless other sectors whose jobs are supported by these exports".

Advocate for the Wisconsin Department of Agriculture, Trade, and Consumer Protection to develop a develop a model voluntary annual contract between farmer and processor. The company says "this came suddenly, for both our company and the farmers".

The company is not releasing the total number of farms it will stop purchasing milk from, but Westers said the clusters of farms were chosen based on their location where milk producers are more likely to find a new buyer for their supply.

Behind this action is a new pricing structure implemented by Canada, which dramatically increased the cost of USA dairy imports and encouraged dairy companies there to purchase similar items from Canadian dairy producers. According to the National Milk Producers Federal, Canadian officials are guaranteeing processors there a lower price in exchange for them buying milk from Canadian dairy farmers. The U.S. dairy industry has complained about a lack of transparency. We can either continue with this increasingly volatile roller-coaster ride that has been brought on by changing worldwide trade policies and fluctuating currency values, or we can decrease our over-reliance on global markets and harmonize domestic supply with demand.

"One day you are looking for the future for your kids", Waterloo dairy farmer Jennifer Sauer told the Milwaukee Journal Sentinel.